E.ON Aktie

Good morning, everyone. Dear analysts and investors, a warm welcome from my side to our first quarter 2026 earnings call. I'm here with our CFO, Nadia Jakobi, who will present our results. As always, we will leave enough room for your questions at the end. With that, over to you, Nadia.

Thank you, Iris, and a warm welcome from my side as well. Only 2.5 months ago, we presented our full year 2025 results to you and updated our outlook until 2030. Today, I will give you an update how we performed in the first quarter. The last months have been marked by a volatile macro environment by geopolitical turmoil. The ongoing U.S.-Iran tensions drive commodity prices higher and increased market volatility. Our results demonstrate our ability to effectively and successfully deal with market turbulence as we have shown before during the COVID and the energy crises caused by the Ukraine war.

The resilience and defensiveness of our unique business model positions us as a safe haven in an increasingly volatile world. Most of our EBITDA is generated in regulated energy networks, where earnings are largely protected against volume and price risks. Strong secular growth trends make us nearly independent of economic cycles. Our predominantly European supplier base and procurement leave us largely unaffected by U.S. tariff developments.

Around 98% of our supply spending is within Europe. Our energy infrastructure business is supported by long-term contracts and price adjustment mechanisms, which provide inflation protection and commodity prices pass-through. And for our Energy Retail business, we have a robust risk management framework and hedging regime in place and have no direct exposure to the Middle East or any directly affected markets.

Before I move to our Q1 results, I would also like to share a few words on our OVO acquisition, which was announced on Monday. This transaction provides us with a unique opportunity to acquire a highly synergistic portfolio. It represents a highly complementary fit to our existing U.K. business. We see 3 key value drivers.

The combination will allow us to drive material economies of scale by optimizing custom operations and offering innovative products to a broader customer base. It strengthens our U.K. market position and enables further development of a customer-centric and digital energy business. Customers are increasingly expecting simple, digital, sustainable, and affordable energy solutions.

This transaction strengthens our ability to deliver exactly that at scale. From a financial perspective, the transaction supports our long-term earnings growth and cash generation. It creates additional financial headroom to further support our investment capacity in regulated networks and delivers a positive EPS impact. We have approached this transaction with clear financial discipline and a strong focus on integration planning from Day 1.

With our track record of turning around underperforming U.K. businesses, we possess the necessary knowledge and capabilities to carry it through successfully. We are excited about the opportunities ahead and are confident that this combination will create long-term value for our customers and shareholders. That said, let me now turn to our results for the first quarter of this year with my 4 key messages. First, E.ON delivered a strong operational, financial performance, which puts us firmly on track to achieve our full-year guidance.

Our adjusted EBITDA reached EUR 3.3 billion, and our adjusted net income came in at around EUR 1.3 billion. This links into my second message. Our growth trajectory is progressing well. Our investments continue to materially exceed depreciation. Most of our investments are allocated to our German Power Networks business to further enhance the energy transition.

Third, our balance sheet remains strong. Economic net debt of around EUR 46 billion in the first quarter reflects the typical Q1 cash flow seasonality driven by the working capital pattern of our business model. And finally, we fully confirm our guidance, including our dividend policy. Let us move on to our Q1 year-over-year adjusted EBITDA bridge. Starting with Energy Networks, adjusted EBITDA was broadly stable year-over-year.

Continued investments in our regulated asset base supported earnings growth across all business regions. This was offset by negative structural effects mainly from deconsolidating one of our regional utility participations in Germany, NEW AG, and the sale of our Czech Gas Networks business. In addition, we saw higher costs to support the continued expansion of our Networks business.

We have continued our track record of operational excellence even as network complexity has increased significantly. Beginning of this month, Germany experienced exceptionally high solar generation, a peak generation of around 46 gigawatts coincided with low holiday demand of only around 43 gigawatts.

This led to prolonged periods of sharply negative power prices at times reaching almost minus EUR 500 per megawatt hour. In these challenging conditions of high system volatility, all of our DSOs were able to maintain full system stability. This effort was also recognized positively by the regulator. Moving on to our Energy Infrastructure Solutions business. Here, we have seen positive earnings effects from the commissioning of new projects and the pass-through of higher procurement costs related to previous years.

In Energy Retail, we delivered a strong first quarter. We saw slight earnings increase in Q1, driven by temporary effects from phasing of price adjustments in our German business, which we expect to normalize over the course of the year. In addition, the performance of our U.K. B2B business has continued to normalize as expected. Our adjusted net income came in as expected at around EUR 1.3 billion.

All P&L items below adjusted EBITDA developed in line with our expectations in Q1. Looking ahead, the current development in adjusted net income is expected to be offset over the course of the year by higher interest expenses. As stated in February, we expect an increase in interest expenses this year, driven by higher net debt levels from ongoing investments and higher refinancing costs for maturing low coupon bonds.

A portion of this is already visible in Q1. Overall, we remain well on track to achieve our full year adjusted net income 2026 guidance. Looking at the development of our economic net debt, I would like to highlight 4 key points. First, our promised investment growth trajectory is progressing, and we are well on track to deliver our full year targets.

Second, the negative operating cash flow in the first quarter reflects the typical seasonal working capital pattern of our business and is expected to reverse over the course of the year. Third, we are well-advanced in executing our 2026 funding plan. Ahead of recent market volatility, we secured EUR 1.6 billion in the Eurobond market and a further EUR 1.4 billion from investors outside the Eurobond market even during the volatile period.

This brings us to a total funding of EUR 3 billion at attractive spreads, covering more than half of our 2026 requirements and underlining both resilience and increasing diversification of our funding base. And finally, our balance sheet remains strong, and we continue to see substantial extra balance sheet capacity over the guidance horizon. And this has just been confirmed yesterday by S&P and Fitch, while affirming our BBB+ ratings with stable outlook.

Let me conclude today's presentation with my key takeaways. First, we delivered the first quarter as promised even against the backdrop of geopolitical uncertainty and elevated market volatility. The strong Q1 outturn firmly supports our expected guidance delivery for 2026. Second, our growth trajectory, especially in Power Networks, is progressing well and continues to drive the energy transition in Europe.

Third, our balance sheet remains strong. We will continue to focus on delivering an attractive total shareholder return based on value-creative organic growth and an annually growing dividend per share. Finally, we fully confirm our full year 2026 guidance and 2030 outlook. And with that, back to you, Iris.

Thank you, Nadia. And with that, we will start our Q&A session. [Operator Instructions] And with that, the first question comes from Julius Nickelsen from Bank of America.

My 2 questions. The first one is on OVO. So you said that the deal will be EPS accretive by 2030. But could you maybe shed a little bit more light in earlier years? Is there any adjustment necessary to the intermediate 2028 guidance? So that would be useful. And then the second one is on German regulation, specifically the OpEx adjustment factor paper, which came out in April.

Would you say that this document materially increases your visibility on regulation now or there are still missing pieces? Or put the question another way, are you internally now able to quantify the impact of this factor? Or is there still some missing pieces that you would need to actually have like a sense on what it could do to your numbers?

So thanks for the questions. So first of all, let me highlight again, we are very happy to have been able to conclude this transaction. I will give you a bit more insight into the earnings impact. So over the overall guidance period, the cumulative ANI impact is broadly neutral, especially -- expect 2028 to be negatively impacted by integration and restructuring expenses.

And then ANI contribution will be then positive from 2029 onwards. And the last guidance year, as we have already highlighted before, 2030, we will see a high double-digit million positive impact. Let me maybe briefly explain why that is.

We have this time very consciously decided to not put restructuring expenses into non-operating earnings but include that in our operating results. And secondly, also that you have got purchase price allocation effects from the depreciation of that from the customer book, that is also included...

Hello? It seems like you dropped out, Nadia.

I dropped out? Since when? Can you hear me now, Julius?

Yes. Maybe it was just me, but I couldn't hear anything for the last 30 seconds.

It wasn't just you.

Okay. So then if it was everybody, we will -- I will just start again and say, okay, look, total guidance period, cumulative ANI impact is broadly neutral, 2028 specifically will be affected by integration and restructuring expenses. ANI and EPS will be positive from 2029 onwards, and then we will reach in 2030 an ANI impact of a high double-digit million-euro impact.

Reason -- and now we have reason for why that is sort of negatively affected in 2028 is because we have consciously decided not to put the restructuring expenses into nonoperating earnings but leave that in the operational result. And second point is that from the purchase price allocation, we expect depreciation of the customer book, which will be also affecting the results. So then going over to OpEx factor, yes, you're right, Julius.

We received in April, BNetzA has published some information, which is not legally binding. Generally, it's a good instrument, which we welcome. It's also good and previously discussed, there were thresholds for the OpEx adjustment factor that are now no longer discussed. What we are critical about is that account foresees an introduction of a 2-year time lag for recognizing the OpEx adjustment factor that deviates from the original proposal and from our perspective, lacks any economic justification.

You asked then about can we now calculate it already and that is currently not the case from what we see here. The mechanism is very closely linked to benchmarking, and the final shape depends on the benchmarking results. And of course, the benchmarking results will be only available in 2028. So the main key parameters remain uncertain. And that's why at this point in time; we are not able to assess the financial impact from the OpEx adjustment factor.

With that, we come to the next question from Harry Wyburd from Exane.

So 2 for me. So first, another one on OVO. Can we just talk a bit about the balance sheet rationale? And for me, it's not a deal I would have expected you to do because you're so focused on the core distribution business in Germany and there's headroom to raise CapEx there. So why did you do this deal? Was it just too good to pass up? Did you feel like you had -- your procurement operation gave you some kind of advantage?

So just why this deal now? And does it preserve your EUR 5 billion to EUR 10 billion of spare balance sheet headroom? Or is it even accretive to that? Or does it affect in any way your ability to raise CapEx on distribution later? So that's the first one. The second one is on AccelerateEU and Iran and what I think we all hope is going to be an accelerated pace of electrification as a result of all of that.

And is there any opportunity to use that as a catalyst to come to quicker agreement on returns with the regulator, perhaps with the assistance of the government? Because my perception is that, we're slightly stuck in the mud for the next couple of years. You've got this trickle of OpEx adjustment factor, the gas regulatory review, but there's nothing coming up in the next 12 months unless I'm missing something that would be decisive and allow you to go ahead and raise your investment.

So could you go to the government or the regulator and say, given AccelerateEU, can you give us some early clarity and then we can go faster? Is that something that's plausible? Or do we have to wait for a few years now to see the final CapEx envelope?

Thanks, Harry, for the questions. So maybe starting with the last part of the first question. We -- as we have indicated, this transaction will actually provide us with a headroom increase of a high 3-digit million-euro impact and therefore, is by no means restricting any investments in the regulated asset base, but exactly the opposite.

So it was -- it is a rare attractive opportunity that presented itself to us to acquire a highly synergistic portfolio. It will strengthen our U.K. market position and will enable further development of a customer-centric and increasingly digital energy business. And it will -- there's really this synergy case that we are after.

And we have the retail business for its earnings generation, but also very much for its cash flow contribution. And this deal will actually enhance the cash flow contribution and therefore, will be very positive for further growth in the infrastructure business. Second point on AccelerateEU grid package, maybe coming to the last part of the question.

So first of all, my judgment would be that it's a good thing, whether this will now swing the needle in German regulation, who is very much on their own time schedule, I would say every little helps, but I would rather see the upward pressure from the German economy from dissolving the bottlenecks from all the requests that we have for renewable connection, battery connection, and industry connection and customer connection.

I would rather see this bottom-up push from all our regional connection requests and also the top-down push from the German politics, i.e., the Ministry of Economics, I would see at this point, more influential for getting faster resolution on the regulation. So -- but overall, AccelerateEU grid package strengthens European resilience to increase incentives for further electrification, which is good.

And it very much aligns with our strategy to drive the electrification through Europe. We like the expansion of industrial electricity pricing and electricity tax relief for customers. We like all additional incentives for electrification because we think it's the right thing. Further details will be worked out in the coming weeks, but we think it's got a positive impact on our businesses, AccelerateEU good package, but not an immediate impact from my perspective on the regulation.

Okay. And just to clarify, the high triple-digit figure. So we're basically saying that if it was EUR 5 billion to EUR 10 billion before, it's maybe sort of EUR 5.8 billion to EUR 10.8 billion now. Is that the right way to think about it on balance sheet headroom as a result of that?

Yes. If you may say so, that wouldn't be outside the ranges that I would have given.

And with that, we come to the next question from Deepa.

Sorry, I'm also going to start with OVO and then ask a boring question on the balance sheet. So on the OVO transaction, I noted that you've talked a lot about the technology stack and synergies and so on. So my main question is you are using the Kraken system in the U.K. OVO has been using Kaluza, which are both, apparently, good and comparable. So what is your assumption on the integration?

Because presumably you can only extract synergies if all the customers -- all the 10 million customers are on the same. So what is your assumption? Will you move the existing E.ON customers to the Kaluza or the other way around? And what do you mean by that digital stack being attractive?

So that was the first question on technology and the plan. Second question on the balance sheet. Just wanted to reconfirm that the overall cash conversion for the full year is around 100%. And would you be able to say where you expect the net debt for the year-end to be? Yes, that's my second question.

So as part of E.ON's acquisition of OVO Energy, E.ON will enter into a long-term license agreement with Kaluza. So as you have highlighted, Kaluza is a scalable, flexible and proven technology platform and simplifies energy billing, reduces costs to serve and enables faster product innovation to facilitate the energy transition. We will conduct an objective assessment of the Kaluza platform, looking at 3 different perspectives.

So first, as a core platform for the U.K. energy retail business; second, for E.ON's businesses in other international markets; and third, as modular components [indiscernible] Kaluza Flex. And then when we've looked at all of that, we will then make an objective choice for E.ON U.K.'s one single retail platform. So synergy delivery is for us agnostic of the platform choice. And as you have highlighted, we will now first assess the platform, and then we will make a decision on to which single platform we will migrate.

And then on cash conversion, we have got the same target for cash conversion, i.e., the 100% cash conversion that we had articulated before. And then when it comes to economic net debt, we stick to our year-end guidance of being below or at least -- or equal to 5.0 economic net debt. And from today's perspective, I see no reason to deviate from that.

With that, we come to the next question that comes from Pavan from JPMorgan.

I just have one big picture question, please, Nadia. Can you just give us a reminder of where we stand with the German electricity networks regulation, upcoming milestones that investors should be looking forward to? And a reminder of the outstanding, if you will, key areas of concern between E.ON and BNetzA, whether it's things on the return or other areas that you'd like to see improve before you have the clarity that we need?

Yes. So I think it's pretty much unchanged compared to what we have said at the full year conference. We have got now a bit more clarity on the OpEx adjustment factor. And as we highlighted there's going to be the gas determination with the draft determination for gas in July 2026 and the final decision by the end of the year, which could provide cross reads for power.

Final clarity for the WACC for power is expected to be until end of 2027, and some of the remaining regulatory parameters like cost audit will be set in 2028. I think we have reiterated the points in what we don't like about the current proposal and where we still have open points. So let me go back to what we said in Q3 and in the full year.

So 7-year look-back period without mark-to-market adjustment for cost of debt for existing assets is for us unacceptable because we cannot refinance our existing assets on that basis with a 7-year look-back period. We have a couple of parameters outstanding when it comes to the cost of equity.

Think we specifically highlighted points around re-dispatch cost when it comes to the benchmarking, where we are in intensive discussions with the regulator to highlight how that is something which would give a strong disadvantage for those who are enabling the energy transition.

And as we indicated earlier, overall, the overall framework must be right for us to earn our value creation spread of 150 basis points to 200 basis points, mostly on pretax WACC. So basically, there is -- on top of the OpEx adjustment factor where we've got some insights now, there is not more news flow that we received in the last 2.5 months.

And with that, we move on to Ahmed from Jefferies.

Actually, I'm going to ask both questions on the first quarter results. My first question is you referenced phasing effects within German retail. Could you quantify that for us as to what is the sort of the number in the first quarter for these phasing effects? And when do you expect these to reverse over the course of the year?

And then my second question is just on the -- very quickly on the D&A and the interest line for the first quarter. Can we see them as sort of good run rates for the full year? Or are there any seasonality effects within -- or sort of adjustments within the 1Q number, which we sort of need to bear in mind?

Yes. Thanks, Ahmed. I think from the German retail business, the phasing effect is a mid-double-digit million-euro effect, which will reverse continuously in the next 3 quarters, which comes through the different timing of price adjustments that we had in -- now in Q1. When it comes to the second question, I think on the interest line, I have alluded to that in my presentation that we will see more increases of interest expenses due to the maturing of low or very low interest bonds, which need to be refinanced.

And of course, due to the growth trajectory that we are in, we also need to finance that growth on top. And on -- I guess on the depreciation side, you will need to take into account that we have, for example, de-consolidated NEW. We have not -- we have sold our gas distribution network in Czech, and that's what affecting that depreciation line.

So maybe just one clarification. All these deconsolidation effects are now through in the first quarter. So just to check sort of all the effects that have come through.

So I think when you look at the gas grid in Czech Republic, that was sort of very low double-digit million-euro EBITDA effect, what I can -- what I know. And then on the NEW effect, that is approximately high double-digit million-euro impact on EBITDA, if that's the question on that. So I'm not fully -- so I don't now have sort of the details of the depreciation Q1 effect on that, but I guess colleagues can come up with that.

With that, we move on. The next question comes from Louis from ODDO.

Maybe 2 questions as well here on my side, one on OVO and one more general. I think that you mentioned that they have around 70% of customers which are under SVT tariff. Does it create, according to you, greater sensitivity to the future option price cap change? And how would you eventually mitigate that risk in your customer strategy going forward after this acquisition?

And maybe another question more general. You repeatedly stressed that you have a resilient business model. And I think that once again in the first quarter, we see that it is indeed the case with reasonable resilience and strong performance in spite of the political and geopolitical environment. What do you see on your side as the biggest external risk for not reaching your target in 2030 today?

Yes. So we highlighted that 70% of the customer base of OVO is related to SVT because it demonstrates that this is a high-quality durable book with a strong average tenure. So that was the point why we highlighted that point. We don't see now additional risk from additional price cap because the price cap is doing exactly that. It is U.K. price cap regulation is based on a comparatively short hedging tracker.

And the integration and the combination of the businesses will only take place once we have done the platform assessment. So the OVO customers will be continued to be supported by the current agreement, Shell agreement that they are on to get their energy procurement. So I don't see an increased risk from that. And then the second, as you highlighted, we are saying, yes, we have got a very resilient business model.

The Q1 has developed fully in line with our expectations. that's why we have -- we don't see now -- I, from today's perspective, don't see big risk. Of course, we always have some operational risk. We need to deliver on our availabilities. We need to make sure that we develop our customer portfolio.

But I wouldn't now single out some risk, of course, bad debt can increase if the gas prices increase for our customers. On the other hand, we are also benefiting from our long-term setup of professionally managing our commodity portfolio. So I'm confident about the outlook, as I have said in my presentation.

And with that, we come to James from Deutsche Bank.

Congrats on the deal. I had multi-questions, but I'll keep it to 2. So the first one is just trying to square what you're saying about the restructuring expenses for OVO. I kind of had in mind that restructuring expenses would be pretty large, like hundreds of millions of euros or pounds or whatever just because obviously, the kind of expectation is you shut down one of the platforms, I presume there's probably going to be quite a lot of headcount losses, but then you're saying you're going to not strip them out as one-offs and overall, it's going to be kind of neutral over the period from a net income perspective, but only getting up to double-digit million euros at the end.

So that kind of seems to imply the restructuring charges could be quite low. So I guess the question is kind of how should we reconcile that? And is there any more details you can give us in terms of what the restructuring expenses that will be flowing through into the adjusted net income would be? I guess maybe I'm over -- was overestimating it. And the second question is on the beta for the German regulatory review.

We've -- everyone's talked a lot about the risk-free rates, the market risk premium, the cost of debt mechanics, the cost of -- the cost cutting or cost allowances, but people haven't really talked much about beta. And as far as I'm aware, there hasn't really been much out from the regulator on the beta. So my question is, what's your expectations? Do you think it will be kind of held broadly in line with what it was previously? Or should we be expecting it to be reduced?

Yes, thanks. So we're expecting total restructuring and integration expenses in a low triple-digit million-euro range across 2026 to 2029. But bear in mind, of course, this is based on the EBITDA impact. So you would assume that from an adjusted net income impact, that would then also, of course, also be tax deductible. Then when it comes to beta is a bit from what I said earlier, yes, on the cost of equity side, we don't have the insight yet. And as you say, its risk-free rate, it is market risk premium.

And it is beta. I think what's positive in the new regulatory regime is that it is now saying that all the different elements need to be looked at from an integrated perspective, i.e., you cannot just pick and choose different kind of tenures, but it needs to sort of be looked at integratedly and I cannot now say I expect EBITDA to develop in this direction because I don't now have any more information on that. As we highlighted -- as I highlighted before, there isn't any additional news flow compared to what we've talked about in full year.

And the next question comes from Alberto.

I have 2 non-OVO questions. And the first one, a bit complicated, but hopefully. So you've done 48% of full year midpoint guidance. So I was trying to understand what you might see going wrong in the rest of the year for you not to be able to upgrade guidance above the top end. It looks like -- I'd love to see if you can comment on that.

It looks like you're trailing above the top end on Energy Networks and perhaps midpoint EBITDA on EIS and energy retail, maybe even a little bit better than that, which together with the lower depreciation would suggest actually you to be above the top end on net income despite refinancing. So I was trying to understand, can you poke holes in these pieces?

What I may not be considering because it seems to me you are really trailing above your guidance. Is it a matter of prudence and we wait and see later in the year? Or there's something specific that we need to think about? And I'm already accounting for all seasonality here.

The second question, a bit broader, but should we expect an Investor Day from E.ON before year-end, maybe to address cost savings plan or any incremental growth, any potential acceleration in electrification we might see from incremental incentives that the EU may start to trickle down in the rest of the European member states?

Yes. Thank you, Alberto. So the Q1 has developed fully in line with our expectations. So the irony is, as you highlighted, a bit stronger than last year, but the Q1 also includes some lower earnings contributions from entities with minority interest in 2026, which is just a temporary uplift in adjusted net income. So that might be then one of the [indiscernible] in your thesis. Then on -- I think you highlighted the 3 different segments.

And in the 3 different segments is also how we've indicated they have been all running in the first quarter in line with our expectations, ICE and Energy Retail, but also the Energy Networks business have developed in line with our expectations. So we don't expect now the full year ANI increase from our Q1 results because the financing costs are expected to rise further and then they bring back the ANI growth year-over-year to be broadly stable.

Yes, second question, Investor Day. Iris, [indiscernible]. So I'm not aware, but maybe Iris said and she hasn't told me. No. So from today's point of view, we have not looked at an Investor Day. I think you also asked the question about cost savings in the full year call, where I think Leo has given some answers. Yes, there is cost efficiency improvement potential in our retail business, which is baked into the results. As you can see, we are increasing the result from a midpoint EUR 1.7 billion now to EUR 2.1 billion in 2030, which is quite some increase.

Of course, there is always also a potential -- there's always a good point in analyzing whether you get -- could gain more from AI. But of course, AI can also produce headwinds because it makes competition more fierce. So I guess we would stick to the answer that Leo has also given in the full year call when it comes to sort of Investor Day and cost savings.

Was there any other thing? I think there's some other incrementals that were trickling down. I think there I would lean back to the answer I gave earlier, yes, in general, this EU political developments are providing us with tailwind, whether that is concrete enough to make out of that in Investor Day in Q3, I would be a bit skeptical.

With that, we have a question from Piotr from Citi.

I have 2. So the question I wanted to ask you, like how do you think about the relation between the rate and your 2030 targets? And I'm specifically referring to the fact that risk-free rates are basically up, I don't know, 20 basis points since the Iran war. We don't know which way it goes. But do you think about it that you will be ultimately able to pass through all of this increase, and therefore, we should think about your 2030 as an upward moving target on the bottom line of EBITDA?

And then specifically on Germany, do you -- does this move of the 25 basis points increase, let's see if it continues, impact your view where you will end up with the total package on the German regulatory view, apart from the technical mechanical adjustment of the averaging and so on. But I was just thinking like do you have some number in mind and it's being changed because of what happened in the market happening. Or do you have more like a floating number in mind?

So for us, we have given sort of an absolute target for 2030. And I think you have covered it quite well. There are, of course, things that are positive and negative on a 20-basis points variation. So as you know, 20 basis -- and we have discussed on the topics around the fixing of the regulated cost of debt in Germany, I think we've discussed on that enough.

And of course, it becomes more difficult to reach that if you stick to this 7-year average. So we are currently not working with floating ANI guidance. So we would be sticking to sort of a firm ANI guidance. And as I said in the presentation, we are fully confirming our outlook for 2030. And of course, the announced acquisition not being part of that.

With that, we move on to Rob from Morgan Stanley.

Just 2 quick questions, if I may, which are really follow-ups from earlier. The first one, just holistically regarding OVO again. Is there any conceptual reason why E.ON cannot turn around the levels of profitability in OVO to where E.ON's U.K. business currently is? I appreciate, sort of, spreadsheet exercises make anything possible. But from your perspective, can you achieve parity with your current U.K. business?

That's question one. And secondly, you talked earlier about the regulatory cost of debt. Maybe I missed it, but when could we hear an update from the regulator on the allowed cost of debt for your existing assets, which seems to be, if I understand, one of the main sticking points with the regulatory package as it looks today.

First of all, for the OVO question, what you need to bear in mind, our U.K. business is not just a B2C retail business, but it's also including a B2B business and some other elements around that. I think we are also serving Telecom Plus customers, et cetera. So you wouldn't just be able to pro rata the per customer result that we have been including in our report.

So you cannot just take the EBITDA that you see in our annual report and divide that by the customer numbers. And then secondly, as I indicated earlier, we'll also have effects on the write-down of the customer book, not the write-down, but the depreciation of the customer book, which will not be finalized by the end of 2030 yet. So that would be that. And yes, it is not only the regulatory cost of debt.

It is also the cost of equity, the benchmarking, et cetera. I think we highlight the cost of debt always because it is sort of -- it's a significant part and it is also quite easy to understand that this is sort of not a fair representation of how we can refinance ourselves in the capital market. I think what we have said, the regulatory cost of debt for gas, which is a very, very small part of our German business will be then determined by the end of 2026, most likely if the regulator sticks to their time lines.

And then for power, we will have the same in the end of 2027. What we don't know yet what is the individual weighting of the different years in the averaging of the cost of debt and seeing this big increase in interest from 2020 to now, it is, of course, highly relevant how then the final cost of debt will be determined.

And with that, we come to the closing questions from Wanda from UBS.

Hopefully, you can hear me.

Yes.

Two questions. One on -- I mean, two on OVO, apologies. There have been many, many questions on OVO today. Do you expect any cash injection into OVO once the deal is closed, so we can understand if there is more cash or any kind of cash equivalents are going to be put into the OVO business beyond the closing transaction then?

And the second one is what makes you so confident about the U.K. retail business? Because this is one of the most competitive markets, right? I mean you are telling us it will be EPS accretive in 4 years' time from now. The political environment is not the best currently, if you look at the recent local elections. So what am I missing on the U.K. retail?

So thank you, Wanda, for the question. So we will benefit from the strong E.ON balance sheet and the transaction has a positive on E.ON's headroom in 2030, as we said, but we will now not disclose any exact cash flows on -- in the business plan. So second point, why do we think the U.K. market is a positive? We have been in the U.K. market since 2000, E.ON since 2002, former npower business was in RWE since 2000.

So we have been acting in the market. And you're right, the market was quite difficult, particularly in 2019 and '20. But what we have shown is that we have consistently been able -- so first of all, we've done a big integration like this with some of the main leadership still being in place. So we have done all that. And when you look back into how we have been able to make positive EBITDA contribution in that business in the last years, it almost always had exceeded investor expectations.

I think we have seen a lot of reasonable way of how the regulator has now been behaving in the market with things like capital adequacy rules, sort of in prior years, in like 2019, we have seen some unjustifiable benefits for smaller operators who eventually went bust and then needed to be saved by the others in the market. So we are -- we see -- and we have a very close interaction.

We see a very -- we see a positive outlook for the market. We have got a very professional relationship with the U.K. regulator for a long time regardless of the political sentiment. So we believe it is an attractive market. And when it comes now to political speculation, we wouldn't now speculate on that. I would see in something as fundamental as gas and electricity, I wouldn't now see that this is then affected by the current political discussions.

Thank you all. Maybe it's also worthwhile for us to sort of demonstrate and show again how we have been able to develop our U.K. business and how we've been able to consistently show very positive financial results in the last years. Maybe we can also bring that to the next -- some of next quarter's meetings or some of the other meetings.

Thank you very much, Wanda, and thank you, Nadia. And thank you, everyone, for your time and participation and interest. If there are any remaining questions, I know some people have their hands up a second time, please reach out to IR. We are happy to follow up with any further questions that might be there. Thank you very much. With that, we close our Q1 call, and have a nice day, everyone. Bye-bye.

[Audio Gap] our full year results. As with every occasion, we will leave enough room at the end for your questions. With that, over to you, Leo.

Yes. Good morning, everybody. Thank you, Iris, for the introduction also from my side. The past financial year has once again proven one thing. We at E.ON deliver on our promises, and we at E.ON are exceptionally well positioned to not only be the playmaker of the energy transition, but also a beneficiary of this transition. In a year that has been characterized by geopolitical instability and macroeconomical challenges, E.ON is a safe haven. One has to admit that our business is facing a secular growth opportunity. It has no U.S. dollar exposure. It's largely inflation protected. It's unaffected by U.S. tariff policy, and it's even largely shielded against the latest fear of an AI disruption. What more can you ask for in terms of resilience. But that doesn't mean that we are without challenges.

And so let me now move to our -- my 4 messages before handing over to Nadia. First, we have delivered strong financial results for the year 2025. again. Second, we have not only delivered financially, we have also delivered operationally. And our focus on outstanding operational excellence means that we are at the forefront of the energy transition, and this enables us to execute our growth plan successfully now and also in the future.

Third, our growth case is based on a secular growth trend, and this trend is extremely robust. It's driven actually by a broad set of structural drivers and not only by one thing changing. And it's largely independent of short-term economic and -- economical and political fluctuations. And fourth, we are committed to long-term shareholder value with a disciplined focus on value creation. We will grow our investments until 2030 and are ready to pursue further growth opportunities, but only once the parameters for RP5 in Germany are set.

So on my first message, we have delivered on our financials with an adjusted EBITDA of EUR 9.8 billion and adjusted net income of EUR 3 billion, both actually reaching the upper end of our guidance range. In 2025, we have on top, executed, increased our group CapEx for the fifth consecutive year, and we have completed a record level of investments into Energy Networks up to 20% up year-over-year, supported by successful project executions across Europe. And this demonstrates again the continuous progress of our growth strategy driven primarily by our Energy Networks business. We are operationally well set up. Nadia will talk you through the details of the financial performance later.

To my second message, we have not only delivered financially, we have also delivered operationally. In August 2025, we crossed a major milestone, around 110 gigawatts of renewable energy sources are now connected directly to our grids in Germany. Let me just give you some perspective. We operate around 1/3, if you calculate it in grid length of the German grid, but we have 70% of Germany's total onshore wind power capacity and around 50% of its solar capacity. We have 58% of the installed battery capacity, you name it. It's like the energy transition is happening and taking place in our grids.

At the end of January 2026, just last month, we hit another milestone. We connected the 2 million renewable energy source to our German grid. For perspective, we celebrated 1 million somewhere in October 2023. So it took us 15-plus years to reach -- to do the first million, it took us 2.5 years to deliver the second million. The third million will happen in less than 2 years. That's the scale of acceleration that is currently just being driven by us. And in parallel, we are delivering on the smart meter rollout. All E.ON DSOs in Germany have met the mandatory 20% rollout target for smart meters with an increase of, on average, 60% in rollout volumes versus 2024.

For us, at E.ON, this makes one thing clear, the energy transition is now an operational task on an industrial scale. And aside from massive investments, operational excellence is a prerequisite, not only to scale the business, but to stabilize also an increasingly complex system.

Regarding operational excellence, let me share a few highlights from 2025 regarding standardization and digital transformation as well as some innovation examples. Within Energy Networks, we have successfully concluded our component standardization project in Germany. This gives our EU-based manufacturers visibility and builds the basis for long-term supply agreements on key components well into the 2030s.

And it contains enough flexibility and scope to support a CapEx envelope beyond what we have in place right now. We are now rolling out this approach across our European DSOs as well to further strengthen supply chain planning and improve component quality across all our DSOs. And in these less standardized markets, we have already achieved a 20% reduction in technical specifications across key categories.

Beyond standardization, we actively pushed the digital energy transformation by embedding digital capabilities deeply into our operations. Obviously, you can't integrate 2 million feed-in points without digitization. So in Energy Networks, for example, our new field assistant app in Germany provides technicians real-time visibility of the power grid real time. I emphasize real-time visibility. Early results show up to 45% less effort for circuit planning, up to 40% less documentation, enhancing both safety and productivity.

In Energy Retail, we continue to invest into digital capabilities that improve efficiency and performance. Based on that, our U.K. business was able to increase digital sales by 30% in Q4 2025 compared to the same period 2024. And finally, as a playmaker, we do, as you would expect, also innovate. In Energy Networks, we are rethinking grid expansion. We developed a feed-in grid socket as we call it, that bundles renewable energy sources at a single grid connection point. The simplicity, speed and cost effectiveness of the feed-in grid socket means that developers can access capacity faster through online booking and achieve a quicker and cheaper route to grid connection.

For our retail customers, we continue to rapidly expand our innovative offerings, and we now have around 16 flexible energy propositions across 6 markets, including the world's first bidirectional charging proposition launched with BMW in September 2025. So standardization, digitization, innovation, the message is clear. This is part of operational excellence, and this is how we deliver and build the foundation for future success.

Let me get to my third message regarding the extremely robust secular growth trend that we are in. On our Capital Markets Day in 2021, which was the last one we did, we set a clear strategic course, focusing the business on energy networks and investing decisively in grid infrastructure. Since then, we have continuously ramped up our investments. When we compare the year 2021 to 2025, the level of energy networks investments has doubled. And many of the emerging growth drivers have not yet reached their full potential. Let me touch upon a few ones.

Continued grid expansion and modernization. It's clear that grid reinforcements are necessary to deal with the integration of renewable energy sources associated -- and the associated increase in volumes. But that's also true for other drivers like data centers. In the south of Frankfurt, for example, we planned upgrades to the high-voltage lines, and that will increase transmission capacity by 2.5x replacing 170 old mass with 135 new ones.

In data centers, we have last year committed to connect an additional 12 gigawatt of data centers to our grid in future years. And just as one example, we will build the connection for 700-megawatt data center in Nierstein, close to Frankfurt, which will be one of the largest grid connections for data center within Europe.

E-trucks, 5 years ago, when we did a Capital Market Day, we were still assuming that hydrogen is going to take a large part of truck transportation. But right now, actually, this is not looking like it. We are moving towards electrification also here, and we are reaching the tipping point with the total cost of ownership approaching parity, if not having being already beyond parity. And the EU-wide CO2 fleet standards require manufacturers to reduce new fleet emissions. This is an emerging opportunity, but also a big commitment of E.ON for the green mobility transition. In Germany alone, we will be adding more than 160 new grid connections for high-performance electric truck charging infrastructure. That represents roughly half of the nationwide fast charging network for electric trucks as initiated by the German government.

So to summarize, our growth case is robust, supported by diverse growth drivers that accelerate well into the decade ahead. And if one driver turns out to be less than in the past, always others have turned out to overcompensate for that. So we are extremely confident on that trend.

And that brings me to my final message for today, the further upgrade of our networks investments that we will do. So we have rolled forward our guidance to 2030, and we will increase our 5-year CapEx envelope from EUR 43 billion to EUR 48 billion for the years 2026 to 2030. We continue to invest at a run rate of close to EUR 10 billion per year from 2027 onwards, which translates into a 10% power RAB growth in Germany. As said, we are operationally ready to invest more. Our processes and capabilities fully would support a higher investment pace that is also potentially really needed.

As highlighted today, it is our continued operational excellence that enables us to capture and convert this growth into strength and value for our shareholders. And our attractive combination of organic growth with a continued dividend growth target of up to 5% per year offers attractive long-term value with an opportunity for more. Now a successful energy transition requires significantly more network investments. They are essential from a macroeconomic perspective to avoid cost. They are good for our customers. They are politically supported in the business case in itself crucial for industry. Therefore, our confidence that final RP5 package will be attractive enough to actually deliver on those CapEx envelopes remains unchanged. We need more infrastructure. More infrastructure is good for German customers. Therefore, we assume that the prerequisites will be in place. What we need as a prerequisite is the necessary regulation that gives us the long-term planning certainty and financial attractiveness to support this further expansion.

With that, let me hand over to Nadia. Nadia?

Thank you, Leo, and a warm welcome to all of you from my side. I'm pleased to share with you the details of our 2025 financial performance and our new guidance for 2026 and outlook to 2030. My 3 key messages for today are: first, we delivered a strong performance in 2025. Once again, our steady execution translated into strong full year results and record high investments, providing growth despite ongoing geopolitical and macroeconomic uncertainty. We achieved an adjusted EBITDA of EUR 9.8 billion and an adjusted net income of EUR 3.0 billion, both reaching the upper end of our guidance range. Our investments increased by 13% year-over-year to EUR 8.5 billion, supporting continued growth in our regulated asset base.

Second, we introduced our 2026 guidance and provide an outlook to 2030. We expect to deliver more than 6% earnings growth, while shareholders continue to benefit from a reliable dividend growth commitment of up to 5% per year. This represents an attractive total shareholder return. We maintain strong investment momentum, increasing our 5-year CapEx plan by over 10% to EUR 48 billion, while strictly adhering to our value creation framework.

And third, our strong balance sheet provides further opportunities to pursue additional investments beyond the current guidance once regulatory visibility on key RP5 parameters in Germany improves. At the same time, it provides us with a prudent buffer against potential risk.

On my first message regarding our strong 2025 delivery. As we already anticipated earlier this year, our adjusted EBITDA came in at the upper end of our guidance range with EUR 800 million year-over-year growth. We saw a significant EBITDA increase in our Energy Networks business through accelerated investments in our regulated asset base across all our regions.

Our annual network investments increased to EUR 7 billion in 2025. As is well known, the result was also driven by value-neutral timing effects. Further effects in Q4 bring the total amount to around EUR 400 million. Most of the effects came from our Energy Networks Europe business, driven by volume effects and recovery of network losses. The remainder is with our German Networks business, where higher volumes and lower redispatch costs added a high double-digit million euro amount.

Our Energy Infrastructure Solutions business grew by around 5% year-over-year to EUR 588 million. The growth was driven by higher volumes compared to previous year and improved asset availability in the U.K. and Nordics. Additionally, we saw investment-driven organic growth as well as continued smart meter installations in the U.K.

Moving to Energy Retail business. Here, we landed as expected at the midpoint of EUR 1.8 billion. The earnings development in the U.K. progressed as anticipated with the well-known effects continuing. In our B2C segment, customers continue to switch from SVT into fixed-term tariffs. In our B2B segment, contracts from previous years continue to roll off. Price adjustments in Germany from earlier in the year had a positive compensatory effect.

Just for completeness, we had a negative high double-digit million euro one-off effect from efficiency programs in our Energy Retail and ICE business. This brings our total one-off effects to around EUR 300 million, resulting in a total underlying EBITDA in 2025 of EUR 9.5 billion.

Our adjusted net income came in at EUR 3.0 billion at the upper end of our guidance range. We continued to see slightly higher depreciation costs caused by the increased digital investments with shorter useful lifetimes. At the same time, our interest cost rose due to the higher net debt level compared to last year and the higher refinancing cost for maturing bonds. On an underlying basis, this converts into EUR 2.84 billion of adjusted net income.

We maintain a strong balance sheet. Economic net debt decreased by EUR 200 million quarter-over-quarter to around EUR 43.2 billion at full year 2025 despite the continued investments in Q4. Our investment increased by 13% year-over-year to EUR 8.5 billion, extending our track record of 5 consecutive years of annual increases following our strategic repositioning in 2021.

Our strong operating cash flow of EUR 3.6 billion was the main driver of the debt reduction in line with the typical pattern. As a result, we closed the period with a comfortable debt factor of 4.4. This shows that we remain fully committed to a capital structure staying below our up to 5x promise to maintain a strong BBB/Baa rating. This balance sheet strength is further supported by 100% cash conversion rate, reflecting disciplined working capital management and the high quality of our earnings.

Turning now to my second message, our new attractive guidance framework. For 2026, we are guiding an EBITDA of EUR 9.4 billion to EUR 9.6 billion and an adjusted net income of EUR 2.7 billion to EUR 2.9 billion. For 2026, we expect a broadly stable EBITDA development. In the Energy Networks segment, continued investments into the regulated asset base will be largely offset by cost for further growth in our Networks business.

Our Energy Retail segment is expected to remain broadly stable at EUR 1.6 billion to EUR 1.8 billion with operational improvements, including increased stabilization of our procurement, largely offset by the structural deconsolidation of one of our participations, moving it to at equity accounting.

In Energy Infrastructure Solutions, continued investments are expected to drive earnings growth in 2026. This development feeds through into our adjusted net income. Looking out to 2030, we expect our underlying earnings to grow by more than 6% on average per year. In absolute terms, that means adjusted EBITDA increasing over EUR 3 billion to around EUR 13 billion by 2030. Over the same period, we expect our underlying adjusted net income to grow at the same pace by 6% per year on average. This takes us to around EUR 3.8 billion by 2030, an increase of around EUR 1 billion.

Let me now outline how each of our 3 business segments contribute to our growth story. In Energy Networks, we are stepping up investments in all our markets, which translates into underlying EBITDA growth of around 6% per year to 2030. Germany is by far the largest contributor, driven by continued investments in the power RAB. In addition, Sweden and Czechia are key contributors.

In Energy Infrastructure Solutions, we expect to see a CAGR of 12% by 2030, turning into an EBITDA of approximately EUR 1.1 billion. The largest business drivers are B2B solutions, including on-site generation, battery opportunities and district heating and cooling.

In Energy Retail, we expect to ramp up our EBITDA to EUR 2.1 billion by 2030. The growth is primarily driven by innovative products such as flexibility and e-mobility offerings as well as higher efficiencies stemming from the centralization of our procurement and further digitization. This translates into exceedingly strong cash generation. By 2030, our Energy Retail business is expected to generate a cash contribution of around EUR 7 billion, almost 3x what we plan to invest. Therefore, Energy Retail plays an important role in funding our investment program.

Let me now outline the CapEx envelope that underpins our growth story. Since our strategic repositioning in 2021, we have consistently increased our CapEx envelope, and we are doing so again. We raised our CapEx to EUR 48 billion for the 5-year period to 2030. We have rolled forward our CapEx for another 2 years. Our CapEx amounts to around EUR 10 billion per year in 2027 and 2028. We will maintain this level in 2029 and 2030. This translates into a 10% power RAB CAGR in Germany, reflecting investments of more than twice our depreciation. This also increases the power share of our total WAP from 88% in 2025 to 94% by 2030.

This expansion is fully aligned with our strict value creation framework, ensuring that each segment delivers a business-specific value creation spread. By far, the largest portion of the investment budget, around EUR 40 billion is allocated to our Energy Networks business. Most of this capital is allocated to power grids.

In our Energy Infrastructure Solutions business, we plan to invest around EUR 5 billion over the 5-year horizon. These investments are mainly allocated to our district heating network, our industrial and commercial customers for decarbonized energy and heating solutions as well as to opportunities for data centers and batteries. Within Energy Retail, our investment focuses on innovative products and -- advancing our digital capabilities to service our customers in an efficient way.

Let's move to our financing outlook. Our balance sheet capacity remains unchanged at EUR 5 billion to EUR 10 billion, even with a higher investment budget. We retain flexibility for selective value-accretive portfolio opportunities while benefiting from high cash contributing of our energy retail business. Hence, our strong balance sheet provides a solid foundation for additional investments while keeping a prudent risk buffer to preserve financial resilience.

As Leo mentioned earlier today, the growth opportunities we have are robust and long term, particularly for power grids. And we stand ready to invest more, considering what is still necessary for a successful energy transition. We are operationally and financially prepared to increase our CapEx run rate in the outer years and invest an additional EUR 1.5 billion to EUR 2 billion per year, considering what is still necessary for a successful energy transition. But for that, we first need the necessary regulatory visibility for improved RP5 parameters.

This brings me to my final message. With our new attractive outlook to 2030, we are fully committed to deliver sustainable earnings growth of more than 6% per year and grow our dividend up to 5% per year. And we have optionality for more based on the structural growth of power grids that is still needed. Our combination of organic growth alongside growing dividends offers attractive long-term value for our shareholders with an opportunity for more.

And with that, back to you, Iris.

Thank you, Nadia. And with that, we will start our Q&A session. Let me remind you all please stick to 2 questions each. And the first question for today comes from Wanda from UBS.

Hopefully, you can hear me. Two questions, one for Leo, one for Nadia. Maybe let's start with Leo. Today, at the Bloomberg interview, you said you are quite confident that you will get a regulation that will allow high CapEx program in Germany. But at the same time, you didn't really raise your 5-year CapEx program. So what makes you confident? How the talks with the German regulator have been going so far? And when do you expect to have enough visibility to basically make up your decision on the financial headroom?

And the question to Nadia, could you please talk about the assumptions behind your 2030 German network EBITDA? What allowed return did you assume? And what is the cost outperformance cut versus today that you assume in your 2030 numbers?

So there is no new information that has emerged over the last months that has changed our position. So the confidence that I've shown is just a repetition of what I've said in the past. And what I also tried to say this morning it's absolutely clear that we have a structural shortage of infrastructure. It's actually not a German issue, it's a European issue, it's actually even in the U.S. It's a general issue. It's number one.

Number two, bottlenecks in infrastructure are extremely expensive, and we see that they are especially expensive in Germany, but they're actually expensive all over the place. The third one, the acceptance, the fact that the energy transition becomes a business place -- business case depends on somehow solving this structural need.

And therefore, like I think it has been acknowledged now by everybody that we need more infrastructure. It has been acknowledged by everybody that we need private capital for that. And therefore, I'm saying, well, then I'm confident that there will be a regulation in place that allows for private capital to be invested via E.ON into infrastructure. And therefore, I'm saying, I can't see why we would not get something like that with all the ongoing discussions. But clearly, it's not that I can point to a big revolutionary development since we last time met.

Now on the question until when will we have visibility? This depends on the news that we get. Like this year, we have RP5 in Germany, we have RP5 in Sweden. But in Germany, actually, we have the OpEx adjustment factor we are expecting eventually, let's say, in the first half, some news what it really is and what it could mean so that we could potentially quantify it. We are expecting regulation on the gas side that would give us potentially a cross read. And we are expecting then the OpEx regulation in the next year with the cost base based on the cost audit that's being done right now. So it depends a little bit on the news that we are getting in the next -- let's say, in the next month.

Yes. And regarding the assumption that we took, we -- please understand that we not disclose the single individual regulatory parameters. What we say and what we have said in the past, our goal is to reach our value creation spread of 150 to 200 basis points ROCE over WACC. And we would assume that we have included that. You can assume that we have included that in our guidance. Yes, full stop.

So in that case, can I ask another question because I didn't really get anything about the 2030 German network EBITDA.

Yes. So again, when it comes to the 2030 EBITDA, we are disclosing at this point in time that our overall networks result is at EUR 9.8 billion as long as I remember that correctly. And we are not disclosing what share of that is now within Germany or in the international business. Because if we were to do that in the end, we would sort of give -- I think we are giving quite some insights, but we don't -- also in the past, haven't given the further drill down into the subsegments.

So you can't disclose the allowed return, which was baked into Germany in 2030?

So what we are saying is our goal is that we aim to get the same value creation spread the 150 to 200 basis points. And our expectation is that all our Networks businesses live up to that.

Thank you, Nadia. The next question comes from Julius Nickelsen from Bank of America.

Yes, I have 2. And the first one is kind of a follow-up on the timing. So as you mentioned, there is the OpEx adjustment factor and then there's the gas draft determination. But let's assume those come out and the outcome is favorable. Is there scope to already do like a CMD or so after the summer to raise the CapEx? Or do we have to wait until basically 1 year, full year '26 until there's another opportunity for you to fully open the CapEx envelope? That's the first question.

And then the second one is maybe a little bit cheeky, but if in your absolute bull case scenario, if regulation comes out, how you like and you can raise the CapEx, do you feel comfortable to give any kind of indication where EPS in 2030 might land in that scenario? That would be quite useful.

Yes. So you rightly pointed out that timing is, let me call it a bit path dependent. And I would, at this point in time, not like to now say it's like let's revisit on the whatever day X in months Y because then we think the timing is too unclear. I would say the following. If we only get good news, then we will react to that. If we only get bad news, then we will react later to that. So sincerely, I can't give you a specific timing right now. This is in the hands of the regulator who now needs to first give us additional information so that we have something additional to say.

And on the bull, I don't want to speculate now on bull, because I think we have given you a guidance what we expect. If -- and if the word would be a paradise, I would try to figure out what makes sense for my customers because then I would know that if I do something which is beneficial for my customers, it will be honored that I have done it. If I do something which is stupid for my customers just because I got a lucky strike somewhere, this will come back at me. So we more have a perspective to do. We do what is needed, and we are confident that the regulation will be good enough. We don't bank on bull's cases.

Yes. Maybe adding to that, we have deliberately chosen that we just keep our annual run rate of CapEx at this level overall, E.ON, approximately EUR 10 billion from 2027 onwards because we have got very positive signs from politics, from what is needed from macroeconomic, also what regulator has been saying that he appreciates that there are higher returns and higher revenues needed, but then we haven't seen anything black on white. And that's why we neither increased our run rate nor decreased our run rate. And you need to bear with us, of course, as we don't know anything more, what we also said in Q3 that we would have hoped, we would know more by this time, but we don't. We cannot also now not guide for a specific EPS increase. On top of what we -- we would say we've already demonstrated, of course, quite a significant EPS increase with a very attractive 6% CAGR up til 2030.

And the next question comes from Alberto from Goldman.

I think you already provided quite a good picture, so I'll avoid talking about returns. But I wanted to ask you one point on the assumption of the power networks, which is maybe 2 parts. The first part is, can we get a feel for how saturated is the German network? We are hearing that network is at capacity around Frankfurt. You're talking about all this gigawatt of data center demand. So do we know with this investment plan, what is the saturation level today? Is it running at 90%, 95% capacity? What will it be in 2030?

And as a second part on the assumption, would you be able to tell us of the CapEx upgrade you presented today, how much is perimeter, how much is equipment cost inflation and how you think about that?

And the second question is actually totally different. Your supply...

I would say it's the third one.

Should I stop here, Iris? I will face the police.

No, no, no.

Sorry. Sorry. Sorry. I will not do follow-ups. So in terms of cost savings, your supply retail business was originally created as a people business, but we are seeing companies putting out there recently big cost savings program, AI-driven facilities and software, natural attrition. So I wonder, is this target including a significant cost reduction effort? I noticed in your guidance, your holding costs are going down quite a bit, but I suspect there's much more to go. Am I right?

Okay. Since the second question was the third one, I'll give a very short answer. Cost reductions are baked in. But I'm sure we will actually see much more opportunities for much further cost reductions, which we might not have baked in. But on the other side, we will see also pressure, which we might not have baked in. So in that sense, AI will change, will clearly change the retail business. But I think that's maybe a good point to make. It's like your colleagues came up with the Halo suggestion.

I really think that the advantage which we have in the majority of our business in the ICE and energy networks is actually that we can't really be disintermediated because the disintermediation of the physical grid doesn't work because it's a physical grid in the end. So AI will completely change. Also ICE business will completely change Networks business, the way we run our processes, but it will not disintermediate us. So that's maybe a nice point to make here.

Now on the add capacity, I think overall, we are in a better situation in Germany than a number of other markets, which we observe across Europe. We have taken note of the load, for example, in the Netherlands or we have taken note of what Endesa presented yesterday or what we have seen in the U.K. I think we are not there yet. But it's clear, whilst we had massive bottlenecks on the TSO level in the past, these bottlenecks are trickling down into the -- from the extremely high voltage into the high voltage and where we have solar also in medium voltage, not yet on a kind of like complete level as in other markets, as I just mentioned.

Now 2 comments. I think we can't give a general statement. It really depends on the region. For example, in Eastern Germany, where we have massive additions of renewables, we are in many places, clearly at capacity already. In others, this is different. So we have to look at it on a regional basis. That is number one.

Number two, it will depend massively on the upgrade, the revision of the grid connection regime, which is under current -- under discussion right now in Germany. I would say if the proposals which are on the table right now for a new grid connection regime, use it or lose it, something else than a first come, first serve, if that materializes, we can achieve much more with the same capacity.

Whilst if we do not change the current picture, then I would think that the grid would run to full usage -- to being fully blocked very fast because we have, let's say, a speculative run for connections. So it depends a little bit on the political debate. And on the inflation and growth, we are continuously looking at that. I'm not sure, did we do in the context of the budgeting a new exercise then? Or is it still the 1/3 or whatever inflation that we...

I think there was more that what we communicated like 1.5 to 2 years ago, when we look now at the higher level, we say from this level that we have been communicating our price inflation is at this point, moderate and it's primarily volume growth. But we, of course, as Leo has said, we have seen a step change of higher inflation when we last spoke about that.

Thank you, Nadia. With that, we come to the next question. Thank you, Alberto. The next question comes from Pavan from JPMorgan.

I have 2, please. So firstly, and it's following up from Julius' question, Leo, but maybe in a different frame. Can you give us an indication of the quantum of which you think you can accelerate the CapEx to 2030? And should we be taking the EUR 5 billion to EUR 10 billion headroom as an indication of the upside you can see there? That's my first question. And secondly, related to that, are you able to talk about or give investors comfort on your readiness, as you mentioned in your opening remarks, to accelerate on CapEx? Do you already have the supply chain capacity that you need, your workforce? I appreciate the acceleration is not coming today, but given it's a big focus, I would appreciate some color around that.

Okay. So I'll take the second one, and then Nadia will follow up on what you said in your speech on the additional quantum. So I would say, first, E.ON, we have put in the last 5 years, a big focus on operational excellence. I tried to say that in the speech. So -- and we are -- we have been building up a workforce. Again, in the last year, we had a net increase of the workforce. So we have built up in the networks around 7,000 additional people over the last years. So we have the workforce, number one.

Number two is we have the supply chain contracts for the critical equipment. I cannot exclude that we will have a bottleneck here or there. But I think actually, overall, for the critical components, switchgear equipment, power electronics, transformers, cables, we are actually well set up. So we should be able to manage that.

On the permitting side, we would need faster permitting that would be -- but we are -- actually, we are set up for the 8-year processes. If we would get an acceleration, we should have absolutely no problem there as well. And on the digitization side, I think we have now pushed the envelope really with the transformation programs that we have done. By the way, the last point is the one where I usually never get a question is the one that I find personally the most challenging one to deliver large-scale IT transformations at -- on time, on budget.

So having said that, with the confidence that I have is we have achieved it year-over-year over the last 5 years. We have always achieved what we said that we would do with a few small exceptions from which we have learned. This year, we have achieved every single operational target that we have set for ourselves. I have absolutely no reason to believe that my organization would not be able to repeat that going forward also with a higher volume. But again, it doesn't come by itself. It's the result of very hard work on all of these topics. I hope that gives you enough color. We can obviously detail that in more afterwards. So Nadia on...

Yes. So regarding the potential for additional CapEx. So when you look at total envelope being like easy to remember, EUR 10 billion per annum overall E.ON CapEx, out of that, approximately EUR 6.3 billion is for Energy Networks Germany. Out of that, approximately EUR 5.3 billion is dedicated to WAP effective -- power RAB effective Germany. So if you then take the EUR 4.3 billion, we would have an additional EUR 1.5 billion to EUR 2 billion per annum, where we could invest more at the -- in the outer years when we look at our network build-out plan that we did in 2024.

Of course, these network build-out plans are, of course, also -- we will have -- we see no new network build-out plans, but the data that we've got compared to this network build-out plan that was issued in 2024, that would be this EUR 1.5 billion to EUR 2 billion more in CapEx from -- in the outer years.

So operationally, we can. And financially, it depends on regulation.

Thank you, Pavan. With that, next question comes from Harry.

This is Harry Wyburd from BNPP Exane. So 2 ones for me. So first, can we focus a bit on this grid connection regime reform because it's actually quite significant and it's actually hit seemingly quite a lot of resistance from certain political parties and lobbies. So if you -- maybe you could just remind us a little bit for those who aren't familiar, what has been proposed here and sort of locational reform and so on. How do you think that's going to end? And is that actually going to impact you because it could theoretically shift around where you're investing? And is that something that feeds into your CapEx deployment or operations and so on?

And then the other one is on affordability. So we've had all these headlines on carbon, all these headlines on EU power market reform. I guess you're, in some ways, a sort of neutral observer here given you're not exposed explicitly to power prices. So I value your independent view on how you think this is going to end. So do you think we are going to get power market reform. Is that going to cut baseload power prices in Europe? And do you see this as something that's actually relevant for you if we end up with lower electricity prices via regulatory change and that triggers higher power demand?

Harry, good seeing you. Two tricky questions as a price for seeing you. Now on the grid connection regime, first, let me just repeat. What we're currently seeing in terms of request is completely unsustainable. There's no question. We are seeing connection requests at E.ON only, we actually published those numbers, 500 gigawatts for batteries, 70 gigawatts for data centers. It's just absolutely unfeasible that we can deliver on that.

Even what we only agreed to deliver is already stretching the limits in the envelope massively, 12 gigawatts on batteries, 16 gigawatts on data center or the other way around, I always mix, that doesn't matter. 28 gigawatts data centers plus batteries in 2025 only, plus 20 gigawatts, nearly 20 gigawatts in renewables. So there is a limit for that.

Now what we are seeing is, we clearly see that there is speculation for grid connection because grid connection is scarce, so it must have a value. If I can secure it, then I have something which I can sell expensively. And since we have the first come first serve and no use it or lose it, actually, this is pretty cheap speculation. And therefore, I think something needs to happen. So this grid package, I think, is just a reaction to an absolute unsustainable situation that needs to be changed.

Now for us as E.ON, it's like don't we -- I mean, it's like if we don't change it, we have to invest like hell and if we change it, we have to invest like hell. So it doesn't really make a difference. But it makes a difference whether we can actually connect customers. And what I'm really afraid of, if you ask me what's the biggest impact of E.ON is that the biggest impact on us would be if we don't get changes and we need to tell consumers that we can't connect them because the grid is full with solar farms, which we have to redispatch.

That would make no sense. And that would be then very detrimental for our perception. So this is what I -- so I'm not concerned financially because I mean it's like the CapEx opportunity is just too big. But I'm concerned that we don't do an efficient energy transition and then we get an affordability backlash at the whole energy transition. So that's the point that I would really like to make here.

Now what is materially in the package? I think you can differentiate 3 buckets of discussion. One bucket is, should we philosophically change the approach, not the first come, first serve, not -- should we introduce something like use it or lose it. And I think there is broad consensus that something needs to change in that direction. That's not contentious. Then the second one is we have many innovations that we could do to just be more efficient in how we connect, for example, renewables. We have technical innovation. That's not contentious either. It depends what the regulation we do, et cetera.

For example, do we get combined connections between solar and PV? Do we -- your 100 megawatt of PV, do you always get your peak or you get 97%. So there are technical details. And then there's a third one, which I would call how do we achieve locational signals so that the expansion of the feed-in happens not in grid-constrained areas. That's one really contentious point because obviously, the renewable players, especially renewable players here have a big interest in getting only locational signals that they can calculate and which don't bite them too hard. But if they don't bite, as we say in Germany, then they are meaningless. So -- and that is now depending on the details.

If you ask me what's going to happen, I think bucket #1 is going to change. Bucket #2 is going to change. Bucket #3 is something is going to happen. Whether it's going to be enough, we will see from the discussion. But I think it's absolutely the right discussion that we are having at this point in time.

Now on the switch, that was regulation on grids. Now on the wholesale power, we obviously have looked -- I have also looked with interest at what was proposed in Italy or what will happen now in Italy. So I'm certainly not the best experts to talk about that. But actually, I would say it's not an economic consideration which has taken place. This is a political -- these are political actions. You are trying to achieve somehow a politically -- a target which you see necessary politically and then you just taking whatever tool works.

I personally think that marginal pricing and the pricing is coming from that will be needed, but the position is weak because we know that if we go to 300 gigawatts of renewables in Germany, marginal pricing won't be the one that is going to incentivize investments anyway. So there will be -- there will need to be a change in the power market design. But what we see here is not building something which is sustainable in 2050 in a 100% renewable world. What we're saying here is a political intervention to achieve a political goal.

Whether this is done efficient? I think the only debate that you can have is, is this more or less efficiently, but I think it's inevitable that we will see this more and more. Personally, I think the discussion will never go away on market design. But luckily, I'm not in this commodity volatile business on the generation side. For me, regulation on the grid side is already enough.

Okay. Thank you, Leo. With that, next question comes from Deepa from Bernstein.

So I had 2 questions. One on the data center opportunity. Can you quantify how much of the EUR 40 billion network CapEx is for connecting data centers? Just trying to get a feeling for how meaningful it is or it is not? So that's the first question.

And secondly, maybe moving away from Networks. Your Customer Solutions business, you've had ambitions to improve your revenues from selling solar panels, batteries, maybe exploiting flexibility. I wanted to check how that development is going. Are you seeing the necessary uptake from consumers for these low-carbon solutions? Is it ahead of plan, in line? Just directionally, how is that going? I know it's a much smaller part, but obviously, you are projecting earnings growth in that business to 2030, and I'm assuming that this would be a part of that. So those are my 2 questions.

I cannot quantify, maybe Nadia can, but I can't quantify how much of the EUR 40 billion is data centers. But I would say there is a remarkable difference between the data center boom in the U.S. and in Europe. So in our case, the infrastructure growth is really driven by multiple simultaneous factors that we're seeing, truckloading, data centers, renewable connections, heat electrification. So the growth trend is extreme -- or batteries and so on. So the growth trend is extremely robust. because it's driven by multiple factors. And we have not quantified how much of the million goes into batteries, into data centers and into renewables.

I think the situation is different in the U.S. where data centers -- in some parts, at least must be the overwhelming driver. So sorry for that. On the Customer Solutions side, I think I can answer it. So yes, we have combined the flex, let me call it, non-commodity retail products that you alluded to. They're part of our retail business -- customer solutions business, I would say. We are seeing a tick up. We are seeing a nice tick up. It's number-wise irrelevant. You said that yourself rightly so. And we would like to see even more aggressive tick up operationally. There, we are actually readjusting every month, so to say. But it's moving.

Thank you, Leo. With that, we move to -- we still have quite a few hands up. Maybe if someone just has one question so to get everyone the chance to actually still ask the question. Louis from ODDO is the next.

Actually, the second one will be very fast. So I think it's going to be okay. So the first one, regarding the capital allocation, I was wondering, in case it's not going exactly in the right direction for you regarding the CapEx expansion, do you have any leeway in your capital allocation to eventually adjust and increase your CapEx envelope in the other geographies? Or eventually, would you consider higher payout or share buyback program in order to allocate maybe better your current financing capacities? That would be my first question. How would you do in a worst-case scenario?

And the second question, which is quite fast, I guess, is regarding the underlying assumptions that you could have taken in your cost of debt by 2030. When I look at your guidance for the EPS, the EPS does not look highly demanding considering the EBITDA. So I was wondering if you were taking into consideration some increasing interest cost of debt in your assumptions for 2030.

I take the first one. So we have a clear plan A, and we are pursuing this plan A. I don't want to speculate on a plan B.

And as you know from us, we are always committed to value creation and to balance sheet efficiency.

So I'm sorry, that sounds like now we don't want to treat you badly, but it's really as short and crisp.

So the second one was cost of debt or sort of why we didn't increase the dividend?

Cost of debt.

Cost of debt assumptions, higher interest.

Yes. On the cost of debt, we have -- when you look at -- we have been just issuing some of our new bonds at the beginning of the year. And when you look at that, we had an 8-year bond, we had a 12-year bond. And if you combine the 2, they were of an average of 3.7%, that is sort of actual numbers we had. I don't know, I think, 95 basis points credit spread on the 12-year duration bond, that is sort of one sign of guidance that I can give to you that also, I think we are communicating later in our pack some of the maturing bonds.

So it's fair to say, as you would anticipate that some of the very low interest bonds are maturing up until 2030 and that need to be then refinanced at these levels that we have been seeing now in January this year. And that is also, as we have been highlighting, when you are confronted with a cost of debt for existing assets, which is just backward-looking 7 years and includes the low interest years, then of course, you cannot assume that you can still refinance at these low levels because everybody of us would love to still do the -- buy a house and finance it on the terms of 2020. Unfortunately, that's not possible. So I think that's kind of the indication that I can give to you.

Thank you, Louis. And with that, we move on to Rob from Morgan Stanley.

I have one question. We've spoken a lot about the regulatory terms to increase CapEx and guidance. But could we just dive into specifically which areas are you looking for from the regulator to improve versus the rest of draft materials we got towards the end of last year?

I think, Rob, there is something -- one of that is what we have just discussed, i.e., being the cost of debt, both the level and also the fact that there is no mark-to-market for the cost of debt on all those assets that are built up until end of 2026. That's something where you cannot refinance at the levels in the market even as we do it in a very proficient way.

Second one, I think we also debated that in this round when it comes to cost of equity, there is just some high-level explanations. We don't have clarity yet. Also this look-back period for the risk-free rate is important. MRP, even if we are going to a higher level, where we appreciate the arithmetic mean you can see that the market clearly demands an MRP of 6% plus. And there, we are still quite a gap apart.

And then there are quite some other elements also regarding the benchmarking that are open and as Leo has just said, so far, we only know that there will be an OpEx adjustment factor, but that's about it. There hasn't been any specification how that's going to work. In principle, this is something that we clearly value and we are welcoming that this has been appreciated that when you grow your CapEx, you also, of course, will grow your OpEx. But so far, we don't know which kind of magnitude this is going to have.

Thank you, Nadia. With that, we move on, thank you, Rob, to James from Deutsche Bank.

I've got one -- kind of one straight two questions. One question and clarification. So the question is on the benchmarking actually, the efficiency assessment. I think you talked about in the past as being quite tough or certainly getting tougher than it has been in the past, but then we had some new proposals come out before Christmas. So I was wondering whether you could just give us an update on whether the proposals there have moved in a more positive direction or whether you still think they're very challenging.

And then the clarification is just on the timing. So obviously, we've got the paper on the OpEx adjustment factor and then the determination of the cost of capital for the gas networks. I think you mentioned you'd have visibility in the next month. Was that for both of those or just for the OpEx adjustment factor? Because I think the paper on the OpEx adjustment factor is due fairly soon, but it was less clear when the cost cuts of gas was due.

So I'm always careful to say it will come out in March because my experience is then it turns out April, and I need to explain all the time where it was in March. So I would say OpEx adjustment factor first half, the gas side, second half of the year. So -- and rather go to the back end and be surprised if it happens earlier. So that on the timing.

Second, in the final papers, there were no real substantial improvements. Therefore, the criticism on the benchmarking is still very clear. We actually have seen that it will be harder to achieve top efficiency, which is okay. That's fine. That's the challenge that the regulator should put in front of us. But we have still seen that redispatching costs are included in the operational benchmarking as influenceable cost.

And since when it -- I mean, clear, 90% of the redispatching costs are with the TSOs, but out of the 10%, which are with the DSOs, we at E.ON get 90%. Why? Because we are the rural guys, which are connecting the renewables and basically putting redispatching into the picture just punishes exclusively E.ON, which has done the most investments, kind of like to achieve an energy transition. I repeat my word, 1/3 of the networks, 70% of the wind, 50% of solar, and then we get redispatch -- and then no agreement on localization signals and then we get the redispatching cost allocated on top of us. Still the same criticism. Really no changes in the final paper versus what we explained to you in the second half of last year.

Thank you, James. And with that, we move to the 2 last questions, while the first one comes then from Ahmed from Jefferies and then Piotr from Citi. We'll then close the call.

I guess just a very quick follow-up question. You just mentioned -- gave us some sort of time lines, right? You said the OpEx adjustment factor and I think it's the draft for the gas distribution that you mentioned. Are there any other data points or milestones that are required from your side to get the clarity? Or are these the 2 critical data points? I just want to make sure sort of just for completeness that if there is a full -- there are other elements as well that we are just aware of what other regulatory updates are required. So that's my first question.

My second question is on retail. This is a follow-up to an earlier question. So retail, if I look at the last couple of years of results, it sort of hasn't really delivered much growth, and you are guiding to growth going forward. I just wondered if you would explain a little bit -- you already talked a little bit about the drivers, but a more profile of this growth as to where the growth will come through. Obviously, you're sort of talking about a sort of flattish profile to 2026. But do we expect to see this growth profile already in '27? Or is this more back-end loaded?

Yes, I'll take the timing question. So I understand from all of your questions that you would ideally want us to give a precise time line when is what materializing so that we can give you a further update. But -- I mean, this is really where I would need to say you need to raise those desires somewhere else, I'm afraid. I can only repeat what I just said. It depends a little bit what information we got.

Look, last year, I told you, I am confident about the outcome because I still believe that if something needs to happen, eventually, it happens because the alternative is just unattractive. So I truly believe we are going to get a regulation which is sufficient to make the necessary investments because the investments are good for Germany, good for our customers.

But having said that, it's kind of like I did not get anything positive last year that actually really helped me to say, I -- now look at this. This is why I'm right to believe that. Now if the next news that come out would clearly show in the direction that, let me say, a basic optimism is okay, then I can be bolder going forward and say, look, this works out, it will come to the right result. Let's make a judgment call.

But if the same thing happens this year that happened last year that I get negatively surprised, like, for example, by this redispatching cost, which you all know annoyed me like hell, if something like that happens again or if whatever details come out on the OpEx adjustment factor make it irrelevant, then it's kind of like then I don't have something. So it's a bit past dependent. But clearly, like the people who can influence that time line are less us, I'm afraid. We can only do operational great work and show that what we are doing is beneficial for our customers and then expect that others will honor that.

Yes. So coming to your energy retail question. So when you refer back in the past years, there were past years also from the energy crisis where we took on a lot of risk when it comes to revenues. So we had high prices. And now we have seen some normalization. We have still stuck to our 3% to 5% B2C margins. But of course, when you had a far higher revenue level, then that sort of meant that the absolute amounts reduced. So that's basically the reduction that you have been seeing coming from -- when you take sort of 2022 and '23 as a basis here. When you sort of go further back into the year 2020 or '21, you see that we've actually seen some significant increase also in our energy retail business.

Second, I guess you are less interested in the past, but more into the future. We're very much aware that we are projecting stable EBITDA from 2025 to 2026. There's one technical effect in there, i.e., we are deconsolidating one of our entities and the equity contribution to that is then because of the joined up grid and retail business, that's now portrayed in the grid business, but going from EBITDA to only a net equity contribution.

And then the second one, so we see some operational growth, but it's fair to say that some of the digital foundations that we need for future flexibility products and the ramp-up that we are seeing will be also late in 2026. And then when it comes to how near term the progression is, I think we have been guiding to an energy retail business in 2028. And then we see some further increase in 2030. So as you say, first stable, laying the foundations, and then we would expect to see some increases in 2027 going forward.

And with that, we come to Piotr with the very last question then for today. And obviously, we're happy on the IR side to follow up on any further questions that you might have. Piotr?

I have just one big picture question to Leo actually about -- how do you think about the grid fee structures going forward in the context of affordability and the need of CapEx, in a sense that a lot of the growth comes from the data centers and therefore, the cost when it goes into the RAB, the connection it's being socialized and therefore, all of the consumers have to pay for it.

Likewise, there are a lot of consumers that really have a lot of self-consumption and also pay less than for the infrastructure. How do you think -- in the context of affordability, would charging for infrastructure differentiated prices to different consumers would not be a solution?

And likewise, when you think about the investments, there are certain investments like releasing redispatch costs and so on. So what is the return on the investments from the consumer perspective on this extra EUR 5 billion to EUR 10 billion CapEx that you propose to the regulator? Because if it's about the data center connection, I agree why the regulator may not be willing to give you the higher rate. But if it's about really saving cost for consumers, then he should be more than willing to spend -- for you to spend this money.

Yes. I think actually, there is a misperception on the impact that data centers have on consumers. If -- now we take the German example and then we -- like in Germany, you have actually -- you pay grid fees and you can pay a lump sum for your connection...

Construction grant.

Construction grants. That's the word, okay. So you have construction grants and grid fees. Now data centers, the overarching target is to get fast access. So they are perfectly fine to pay high construction grants. That's number one, which means actually that the cost really socialized in the grid fees are not that big. Second is they are actually pretty big consumers. And we have energy-related and capacity related, I mean, fees in Germany.

So what happens actually if a data center gets added into your DSO area, you as a consumer, a B2C customer, you see lower grid fees because then the same -- basically the same cost base is spread on a larger volume. So -- and that's actually the whole way how the energy transition can work. We need to increase electricity volumes so that we can allocate the higher cost base on a higher volume basis. And so specific costs stay constant or even decline. So data centers in a DSO area reduce the grid fees.

Now on the generation side, they need additional power stations. That's what's being discussed in the U.S. right now. Obviously, if you have like in Tennessee, a 5 gigawatt, whatever data center, you don't want to put that into the rate base and then have the consumers pay for the 5 gigawatts of additional generation capacity. But if the data center comes with its own PPAs and new assets, then it's actually fine. So in our case, data centers in Germany would reduce the grid fees and actually would be beneficial.

Now on the wholesale market side, they would need -- they would require more baseload capacity probably, which is why we think generation capacity needs to be added. But so for us, data centers are beneficial for us at E.ON, data centers are beneficial from an affordability standpoint. They make our life easier.

Thank you, Leo. Thank you, Piotr. With that, we come to an end. Thank you all very much for participating and the interest in E.ON. And if there's anything else you would like to discuss, the IR team is happy to follow up with you. Thank you, Leo and Nadia. With that, I close the call for our full year '25 presentation. Take care. Bye-bye.

Thank you.

Bye-bye.

Good morning, ladies and gentlemen. I would like to welcome you warmly to our annual press conference. I would like to welcome all journalists here in the room. Very happy that you have come here despite the difficulties of the bridge that is blocked and all other traffic difficulties. I would like to also like to welcome all journalists in our virtual room.

Our CFO, Nadia Jakobi; and CEO, Leonhard Birnbaum, are here. As always, both of them will give you an overview of the past fiscal year in the next 30 minutes, and then you'll have the opportunity to ask questions.

And with this, I'd like to pass the floor to Leonhard Birnbaum. Go ahead.

Lars, ladies and gentlemen, good morning from me as well. I'd like to welcome you to our annual press conference for fiscal 2025. my text says 2025 was marked by economic and geopolitical uncertainty. That hasn't improved in 2026. So we will have to live with that probably as in previous years, unfortunately, this uncertainty has reached a new dimension and much of what underpins international corporation and creates stability is now being called into question. The confidence in reliability and predictability has been lost, but these developments are beyond of what we can control at E.ON.

Nevertheless, what we can do as a systematically relevant company is living up to our responsibility and help make Europe strong. And therefore, I'm happy to be able to say that E.ON has concluded fiscal 2025 successfully. We are delivering financially on the promises of our growth strategy. With an adjusted EBITDA of EUR 9.8 billion and adjusted group net income of EUR 3 billion, we have fully met our guidance, and Nadia Jakobi will comment on the details in a minute.

What is even more important to me is that we have not only delivered financially, but being the playmaker of energy transition in Europe, we delivered operationally as well. And in particular, we continued to systematically implement our investment program. In 2025, we invested EUR 8.5 billion in our company's future viability and that's in Europe's energy transition in products for our customers, in security of supply and in the modernization of critical infrastructure.

This performance and this increase, EUR 8.5 billion and EUR 1 billion more than last year is not automatic. It's the result of clear priorities, a high level of operational discipline and an organization that remains fully capable even under pressure. And it's above all the result of our employees' hard work and dedication. Day in, day out, they ensure we make energy work reliably, safely and affordably. And for this, I'd like to express my sincere thanks to them.

Today, ladies and gentlemen, when we talk about the energy transition, it's no longer about the vision of the future. It's about implementation. It's about networks, connections, digitization, resilience and secure energy. It's about innovative products for our customers so they can participate in the energy transition. And E.ON, we can definitely say that is at the forefront when it comes to implementation. By the end of 2025, about 70% of onshore wind capacity and almost 50% of solar capacity were connected to E.ON's grid in Germany. And this is despite the fact when you look at the length, we only have about 1/3 of the German network. So we have connected more renewable to our grid than others.

The energy transition is taking place in our distribution networks. Just recently, we integrated the 2 million renewable energy plant to our German grid in January, February, I think it was. The total connected capacity of all these assets in Germany, renewable assets, that is, now stands at roughly 110 gigawatts. And it took at least 15 years to connect the first million, whereas the next million took us just about 2.5 years, and we are now seeing the third 3 million in less than 2 years.

This shows the extraordinary pace at which we are developing the system. It's a growth segment. And everything is developing. And this dynamic growth can only be managed if networks are systematically planned in advance, digitalized and industrialized. And that's why we're investing massively to expand and modernize our network infrastructure. And that is also why we are continually adapting our processes and supply chains to meet requirements.

As part of our supply chain initiative, last year, we signed long-term contracts with manufacturers of core components for network infrastructure. This is how today we are already securing our future ability to deliver. And one thing is clear, as the system grows, so does its complexity. Decentralization of volatility, new loads are fundamentally altering the requirements for network control and stability. Despite this, it's no coincidence that Germany still has one of the world's most stable power networks with an average outage of less than 12 minutes per year and E.ON, thanks to our systematic investments in digitalization, automation, system intelligence is making a major contribution.

The journalists who are here today, we will present some of these things to you later. And those of you who are not here today, I'd like to motivate you to come to next year's Annual Press Conference. So we are making consistent investing in system intelligence. We are the leaders in the energy sector. And this is in exotic forms, for example, the -- our rating in the Quantum Innovation Index. E.ON is propelling digitization. One example is a digital twin for our German grid or the installation of smart substations where we can measure the condition of an asset and control it at any time.

By the end of 2025, we have put a total of around 30,000 smart substations into operation in our German network area. And this helps us to control networks in real time, manage load proactively and balance out fluctuations before our customers even notice them. A key prerequisite for our digital infrastructure is the rollout of smart meters. For E.ON, it was never a question of whether we would achieve the mandatory quota of 20% by the end of the year, but rather how we will achieve it. You can see it on this chart here. We delivered even under challenging conditions.

All E.ON units in Germany surpassed the mandatory quota in some cases significantly. Our average rollout rate was 30%. This operating strength is also the foundation for new customer solutions. We develop innovative products that enable our customers to actively benefit from the energy transition. These primarily include flexibility solutions like Germany's first bidirectional charging tariff, which we developed in partnership with BMW or E.ON Home Comfort digital energy solution that automatically optimizes decentralized systems. And outside Germany, we did nice things. For example, in the United Kingdom, we forged a partnership with Usuno, a technology and service platform to better support our customers in their decision regarding the installation of heat pumps end-to-end.

So heat pumps, solar panels, charging solutions and batteries can now be used in their homes. We also help -- our integrated energy solutions also help industry businesses and municipalities to decarbonize. A project like wind heat Ludwigsfelde shows how wind energy can be used to supply heat to a large industrial park and city. So both directly and when there is no heat -- demand for heat, where they can feed into the network. And you can see that on the right-hand side, the planned United Heat joint venture where -- we are connecting German and Polish cities in the Görlitz area to achieve a transnational decarbonized heating solution for both countries. In short, E.ON delivered and we lived up to our responsibilities and whenever and wherever we were needed.

E.ON is one of the largest investors in Europe's energy infrastructure these days. And if we are not even the largest one, the surge in our investments, particularly in our network business, clearly demonstrates this. For the period 2022 to 2026, we plan to invest EUR 22 billion -- this is when I started here, EUR 22 billion and it was EUR 26 billion from 2023 to 2025 and EUR 35 billion up until 2028. And we now plan to make group investments of EUR 48 billion for 2026 to 2030, of which EUR 40 billion will go towards our network business in Germany and abroad. These figures represent a clear commitment.

We deliver and we are prepared to continue making a significant contribution to the transformation of the energy system in the future. But at the same time, investments of this magnitude require the right regulatory framework, including for the upcoming regulatory period in Germany. Our investments must be profitable for them to be financeable. We've made this assumption in our planning and therefore, explicitly subject to our planning to this proviso. After all, sound regulation is a precondition for the necessary expansion of this infrastructure to continue at a sufficient pace in the years ahead.

One central point is affordability determining the energy transition success. E.ON is actively committed to offering our customers solutions that meet their individual needs. I just gave you a few examples, but that alone isn't enough. Last year, Germany's Renewable Energy Sources Act had its 25th anniversary. And during these 25 years, we have seen a huge ramp-up of renewables. And that's why we achieved 58% of the country's electric last year from renewables. And E.ON is proud that our grid infrastructure helped make this possible.

Nevertheless, we made it clear some time ago that the uncontrolled growing growth of renewable energy plants that need to be connected to the network will further drive up system costs for our customers. And this will call into question the energy transition's public acceptance and long-term success. And therefore, I can only repeat what I said 1 year ago at the press conference. The first half energy transition is over and now the second half has begun. And in the second half, we must play a different game than in the first one.

We now need to fully concentrate on continuing the development of the energy system and make it as affordable as possible. Affordability and reliability are on top of sustainability that cannot be ignored. E.ON cannot and will not implement the energy transition without considering the customers' interests and Germany should not advance the energy transition in the long term without considering its citizens' interest and its economy. And that's why it's particularly welcome that the German government has recognized this necessity and is beginning to systematically address it.

I just said it, we need to play the second half differently than we did in the first half, and that means different rules here and there. So what is need -- the energy transition must now become system transition. A demand-oriented energy system planning will be essential. And according to our calculations, there is a savings potential of EUR 15 billion annually. The new maximum must be only as many renewable facilities as Germany actually needs in the years ahead, in line with the development. And these facilities must be integrated in the right places and so that they benefit our customers. And this includes subsidy schemes that need to be systematically reviewed.

Network connections are another area. E.ON has developed a wide range of solutions to make better use of grid capacity and connect system faster. Examples include we have too many requests, which we cannot serve. So we, as E.ON are playing our part, as we already said, 20 gigawatts of renewables last year, 12 gigawatts for data centers and then contracts for large batteries, the 70% gigawatts of renewable did we had that last year as well in 2024 and 2025. We are playing our part, but cannot continue this way because we are coping with the biggest part. So we have developed new concepts as well, feed-in sockets and flexible connections. But our -- the volume of request is beyond what we can deliver.

The Federal Network Agency in its scenario is expecting an actual demand of 41 to 94 gigawatts of installed large battery storage capacity. Yet last year alone, E.ON was able to confirm grid connection request for new storage capacities totaling more than 16 gigawatts. So even if not all of these systems are built, the ramp-up, the way it is now is -- doesn't offer an advantage for our customers. So that means we need a new net connection regime. And for that, we need a reform in various places.

First of all, a new grid connection regime must be created that moves away from the first come first serve principle and focuses on clear criteria, smart priorities and legal certainty for grid operators. And so legal certainties for the operators as well. What drives me personally is that the first come, first serve principle means that we cannot serve demand because we are fully utilizing the node with new renewable batteries. And then later, the investor wants to electrify their site. We have to tell them, sorry, we don't have capacity until next year. That's not acceptable. We need to change basic principle. We need a totally different logic. Secondly, significantly faster approval procedures are needed for grid expansion.

As part of the acceleration of the old traffic light coalition, we also requested that for the 110 kVs, we get the acceleration, and we didn't get it, but we do need it. Otherwise, we can never reverse the bottleneck because building has happened faster.

And thirdly, we need local signals, cost signals that send a steering effect. The Ministry of Economic Affairs and Energy is considering reservation regarding financial compensation in the event of curtailment for renewable energy plants in grid congestion areas. That's understandable. Some sort of instrument is required, and we would then have to look at the details in the future. But without such an instrument, we cannot reserve the -- reverse the bottlenecks. We therefore welcome the fact that the German government is working on initial proposals for reforming the grid connection regime. And it's no coincidence that leading associations representing industry and the data center welcome that and see it the same way we do -- see it.

There's another point, the importance of significant was shown in Berlin as well. Without electricity, people can end up in difficult or life-threatening situations. Allow me to take this opportunity to make 2 personal remarks. Firstly, attacks on infrastructure are brutal act of terror. They endanger human lives. They're inexcusable. And second, if 5 days in Berlin kept us on edge as being very critical, which they were, then imagine particularly today, I mean, yesterday, we had the anniversary of the Russian attack on Ukraine. We need to pause and think about the suffering endured by the Ukrainian people under Russia's terror attack, which is inexcusable. Since they cannot win at the front, they resort to terror attacks. So we must do everything we can to help Ukraine and its people in their fight for freedom.

Now back to Berlin. The right conclusions must now be drawn from the experiences. The Bundestag’s decision on the KRITIS Umbrella Law is welcomed. But at the same time, demands for a completely redundant network infrastructure are neither effective nor cost efficient. The attacks showed that the technical redundancy alone doesn't guarantee resilience. Resilience means designing systems and processes in such a way that they can cope with disruptions or attacks swiftly and recover quickly. And this is where the focus needs to be because there can be no such thing as a complete protection because if we lie on this kind of protection, then we have an issue when it fails and it will fail.

In addition, existing transparency must be reviewed and withdrawn where they could jeopardize the security of critical infrastructure. And it's also conceivable to establish crisis hubs in the various network regions. In any case, we are glad that our E.ON units were able to restore electricity service in Berlin faster than anticipated. The solidarity within the industry was very remarkable. And the corporation showed how important a trustful corporation is for the benefit of our citizens. E.ON stands for reliability towards our customers, towards society and towards shareholders. We invest, we deliver operationally, and we live up to our responsibilities for an energy system. And we are prepared to do that for the future as well.

And I hand over to Nadia.

Well, thank you very much. I would like to also welcome you to our annual press conference. E.ON in the past year, again demonstrated how robust our business model is in a volatile market environment. We further increased our operating effectiveness, continued to purposefully develop our business divisions and systematically raised our investments to a new level. Adjusted group EBITDA was at EUR 9.8 billion, and that was at the upper end of our guidance range and 9% above the prior year. Adjusted group net income rose to 6% to EUR 3 billion.

Let us now take a look at our business division's earnings. The Energy Networks business division was again the main driver of E.ON's growth in fiscal year 2025. It achieved adjusted EBITDA of EUR 7.7 billion, which was 12% above the prior year. This increase was mainly due to the further growth of our regulated asset base as a result of our investments. Our network business in Germany as well as in Southeastern Europe also benefited from higher-than-anticipated distributed volume. Regulatory catch-up effects, particularly regarding network losses in Hungary, made a positive contribution to earnings as well.

Our Energy Retail business division recorded adjusted EBITDA of EUR 1.7 billion, which was at the midpoint of our guidance range. As already mentioned in previous quarters, Energy Retail's earnings performance was significantly influenced by portfolio effects in the United Kingdom, which resulted mainly from a higher proportion of customers with fixed price contracts. Business in Germany improved moderately, although expenditures on digitalization and customer management dampened growth.

Adjusted EBITDA at Energy Infrastructure Solutions was at EUR 590 million and thus slightly higher than in the prior year. The factors contributing to this growth included higher asset availability in the United Kingdom and Scandinavia, increased heating demand in Germany due to weather conditions and further progress in our smart meter rollout in the U.K. The strong demand for our integrated decarbonization solutions from district heating projects and industrial energy infrastructure to local storage solutions was particularly gratifying.

E.ON's investments reached a new benchmark in fiscal 2025. They amounted to EUR 8.5 billion, which was EUR 1 billion more than in 2024. EUR 7 billion of this went toward our network business alone, a year-over-year increase of around 20%. These investments reflect the need to further expand and modernize our network infrastructure and upgrade it to meet increasing demands. We are investing precisely where the energy transition is being decided, and that's in our distribution grids. We also made targeted investments of EUR 480 million in Energy Retail and roughly EUR 900 million in Energy Infrastructure Solutions, both of which are future growth businesses. Investments in the Energy Retail business went particularly toward the Europe-wide expansion of charging infrastructure, new customer-oriented energy solutions and digitalization.

Our investments in Energy Infrastructure Solutions were aimed primarily at developing our decarbonization projects for municipalities and industrial customers. One message is clear. We prioritize investments that strengthen our operating performance and further consolidate our role as a reliable infrastructure partner. Our investment strategy is based on a solid balance sheet and disciplined financing policy. Despite high levels of investment, our year-end debt ratio was 4.4x, well below our upper limit of 5x. The financing of our growth remains long term, stable, predictable and above all, sustainable.

Around 70% of our bond issues in fiscal year 2025 consisted of green bonds. This added value benefits our shareholders as well. It enables us to propose a dividend of EUR 0.57 per share for fiscal year 2025, an increase of 4% year-over-year. This means we are reliably keeping our promise of an annual increase of our dividend of up to 5%.

I'll turn to our guidance for the current fiscal year. Starting in 2026, we are adjusting our adjusted group EBITDA and adjusted group net income to exclude temporary regulatory effects in the Energy Networks business. On this basis, we expect stable earnings at the adjusted prior year level for fiscal year 2026. We anticipate adjusted group EBITDA in the range of EUR 9.4 billion to EUR 9.6 billion and adjusted group net income between EUR 2.7 billion and EUR 2.9 billion. This corresponds to adjusted earnings per share of EUR 1.03 to EUR 1.11.

I'll turn now to our medium-term plan. It demonstrates clearly that E.ON continues to invest and to systematically pursue its growth path. Today, we affirm our clear growth strategy. We plan to invest EUR 48 billion for the period from 2026 to 2030. Around EUR 40 billion thereof will be invested in energy networks and about EUR 2.5 billion in Energy Retail and around EUR 5 billion in Energy Infrastructure Solutions. This plan reflects the increasingly growing needs of Europe's energy system from renewable energy generation, flexible consumers and data centers to storage technologies and industrial transformation.

An important point that Leo Birnbaum already mentioned is also very close to my heart. Our business' ability to help implement the energy transition at the necessary pace depends largely on an appropriate regulation. We need a reliable regulatory framework. We need secure refinancing of our investments. Regulatory requirements must recognize additional demands on the resilience of critical infrastructure. Germany's network connector regime must set more priorities so that resources can be allocated effectively. Our investment plans are, therefore, expressly subject to an economically adequate regulation. Only then can private capital be mobilized on a large scale.

Based on our planned investments, we expect adjusted group EBITDA to rise to around EUR 13 billion by 2030, adjusted group net income to around EUR 3.8 billion and adjusted earnings per share to around EUR 1.45. This growth is no coincidence, but is the result of the consistent execution of our investment program, and it is based on a clear and robust operational logic. All 3 of these business divisions will contribute to it, supported by their operating performance, efficiency and systematic digitalization.

Ladies and gentlemen, 2025 was a year of implementation and progress at E.ON. We delivered operationally, financially and strategically. We further strengthened E.ON as the playmaker of the energy transition as a reliable partner for customers and policymakers and as a sustainable investment for our shareholders. I'd like to thank our teams in all markets. Their commitment and professionalism are the foundation of our success. And I now look forward to your questions. Thank you very much.

Thank you very much, Nadia and Leo. And with this, I would like to open the Q&A session.

[Operator Instructions]

The first question is from Ms. Höning. As always, it's nice. From Rheinischen Post, Ms. Höning.

I have 2 questions concerning the Heating Act, which was adopted last night. How do you like it? And how do you like the green fuel, ad mixtures that may also affect you? And how did the number of electricity customers develop in Germany? And what do the consumers have to expect as far as prices are concerned?

The Building Modernization Act is what it's called now. That's true, has been adopted. It's a pretty big regulation, and we haven't really looked at it yet. And I don't want to give a quick assessment because the details are important. And you really have to understand if a quota is to be applied. I currently do not feel myself able to make an assessment and to be able to tell our customers what impact it may have on them and on us as E.ON. That was really too much at short notice.

And as far as the customer figures are concerned or the price adjustments, our German retail business reduced electricity prices on the 1st of January and gas prices on the 1st of January and electricity prices on the 1st of February, customers will be benefiting from this and customers are at about 14 million. 14 million customer contracts currently in Germany.

And what -- how do you see the future with regard to prices?

Well, as far as prices are concerned, we are known for offering opportunities or the price development of the wholesale markets are passed on to customers at short notice. The price adjustments have just been made, and we are not giving any outlook on future price developments because they depend on the wholesale markets.

We also have some other questions in the room. Let me -- the next speaker will be Ms. Kapp from Handelsblatt and then Natan Witko from Montel, Eva Brendel from Bloomberg. Kapp from Handelsblatt, please go ahead.

Yes. I'd like to hear about your take on the network package. You also mentioned a few points, Mr. Birnbaum. The way it looks at the moment, this first draft, if it is passed that way, would you then be entirely happy with it? Or would you like to see further adjustments?

Well, first of all, it very much depends on the details. I have to say, because the same headline can depending on the details, have a very different effect. So I cannot give you a blanket answer. What I can say, though, and I tried to say that in my speech earlier, what I do like is that the underlying thought has changed. We had first come, first serve, which led to people throwing out their towel to reserve the place, whether or not the place was actually needed or not. So now we are saying we want to introduce a different principle and really give the grid to those who really want it and not speculate. And second -- then actually go ahead and do it and not just hope to set on the connection. So that's a good approach. So the principle is to be welcome.

Second, there -- it contains a lot of creative and innovative approaches. So instruments we should use, for example, technically the sockets and so on. I do welcome all of that as well. Regulation needs to be changed for that to happen. And once this is done, it will provide or make more grid available for less money. And thirdly, we need the localization elements in there. I mean the re-dispatch reservation that's in there needs to be shaped in one way or another at the end of the day. At the moment, it's designed for the new plants that come in congestion areas. So there will be no compensation, which is understandable.

But what is temporary, what does no compensation actually meet? It depends on the detail. So what we need, regardless of how we do it at the end of the day, and therefore, it is dependent on the detail, we need some decision that actually puts flesh on the bones of this signal. If it doesn't have an impact, then, well, it will not change anything. So principally, it's a good starting point. It's a good package, and it's great to have this debate now. It's very much overdue. Whether it turns out to be a nice package or not, we'll have to see.

Thank you, Ms. Kapp. And then Mr. Witko from Montel, please.

I was going to ask about redispatch as well. You just said it was understandable this change. Can you perhaps expand on that because some energy utilities have called it absurd. You're saying, for example, that it will lead to a reduction of investment in renewables and factual split of the uniform German price zone and all of that without any incentive for the construction of grids to reduce the burden on the infrastructure. So how would you respond to these kind of statements?

Well, I think this warrants 2 answers. One, the approach to me, we could have done more there. And the second is the content side of the discussion. So when the voice is loud enough, then a critical point has been found. If nobody says anything, then you need to think. So a controversial discussion is good. So what's the topic here? We have areas in the grid today objectively where we know that when we connect there, nothing is going to happen that will benefit the customer. The only thing that we will do is spend more money on redispatch.

Now you all know the 3 percentage -- 3% for redispatch. So there's a congestion area and the 3%. Let's leave it at the 3%. So what does it mean? That means if you build in that area, then the likelihood that the additional capacity will -- the output of that will not be limited by 3%, but by 30%. So the grid is already full. If capacity is added, then the output will not be just limited by a little. It's wasted. So the additional construction needs to happen where it creates benefit for the customers. That's important. And therefore, from my perspective, it's necessary for us to have this debate.

Now the second question is, all of that wouldn't have been necessary had you built enough infrastructure. I fully reject this accusation. And I've got proof with me, if you like, Back in 2020, we did analysis as to what we need in terms of grids. I can give you a copy of the study later. We did this with French economics in the University of Aachen. We made assumptions about the renewables, PV, et cetera. All of these assumptions were much lower than what we have today. So we were totally wrong with our assumptions. We're well too low. That's statement number one.

Statement number two is we didn't see any data centers. We didn't see any batteries and trucks, we believe would run on hydrogen. Now all of this is on top now within 5 years. At the time, we said the 2 little investment need to be avoided from an overall macroeconomic perspective. So at the time, we were accused of just wanting to build networks to increase cost for customers. And the same people are saying now you should have built new more networks. And even though permitting takes 8 years for 110 kV networks, it's not possible. If it takes 8 years to get a permit, then we cannot fundamentally change anything within 5 years. But again, the forecasts were much lower and still we were said it's not possible. So I fully refute and reject this accusation.

We cannot compensate a build-out that is fully uncontrolled in the market. And those who are shouting most are the ones that profited most in the past. That's always how it is.

Does that answer your second question as well? You answered 2 questions. You asked 2 questions.

Okay. If I can ask another question, but this is a different topic now, but the data centers -- or is artificial intelligence a blessing or a curse or a threat for the energy transition?

I think artificial intelligence is going to play a role everywhere to say we can decide whether or not to do it or not would be a mistake for the German economy, it's absolutely vital to proactively do something about AI also for the benefit of this -- our benefits of this country, our customers. So we need to use artificial intelligence and not see it as a threat and manage it as a threat. That's my statement.

For our customers, data center means reduced network tariffs because the data centers increase demand. They pay the network tariffs and the network tariffs paid by the data centers don't have to be paid by the customers. So that's good. And if the data centers then build their own generation capacity, which they sometimes do, then from an energy perspective, they are advantageous. And from the customer perspective, they're advantageous and also for society in our economic development. Mr. Wildberger is now saying we need to build data centers in Germany. And we need to provide the right framework for that.

I was shocked therefore that in Groß Gievitz, it was decided not to do so. We have to do it. Without data centers, Germany will turn poor. Without AI, there will not be a good Germany going forward.

Then if Brendel, I need a little help because I have been seeing Mr. Steitz from Reuters, but he's not on my list. Can you please check what the sequences? I've seen you, Mr. Steitz. And also Mr. Schulte, I've seen you as well, but Mr. Brendel first, please.

My question is that you said that you want to invest EUR 5 million to 10 million -- or could invest EUR 5 billion to EUR 10 billion more. When exactly will you decide whether or not you will invest this EUR 5 billion to EUR 10 billion? Will this happen as soon as the Federal Network Agency has provided more clarity on the return on your equity? And once this has been decided, would it be invested in the current period up until 2030? Or could it be possible that you invest this after 2030?

Well, first of all, you're right. We have a leeway of EUR 5 billion to EUR 10 billion compared to the minimum rating target, which we set for ourselves. So this allows us to invest more, but it also provides a certain risk buffer because we will not invest down to our minimum rating. We now have a very attractive new investment program and decided very consciously. Even though as Leo said, we could invest, we've decided not to do so for the time being because the parameters defined by the Federal Network Agency are not right in terms of the return situation. And you mentioned it.

Once we have more clarity on that, then we will be able with our operational performance to raise these investments, and we'll be able to do that from 2029 onwards when the new regulatory period starts. But the earlier we have clarity, the earlier we can, for example, from 2027 or 2028 onwards, if there is an attractive regulatory regime, we could start investing in 2029. But for that, we need early signals, early clarity. And with what's been published so far, we haven't had that clarity.

Thank you very much. And now we -- I can see the right order. So Mr. Steitz, who has joined us online is next, followed by Mr. Bathke, Mr. Schulte and Ms. Becker.

Mr. Steitz?

I have 3 questions. The first question is Mr. Birnbaum. You referred to grid resilience. And you also said that transparency measures would have to be eliminated in order to safeguard or achieve more protection. And I know this is a very important topic for Germany as well. Could you elaborate on that?

Your investment program is accompanied by a disposal program of about EUR 2 billion, which you weren't that clear when you talked about that, but it is oriented towards strategic incentives. Could you please give us more details? Romania apparently is not that you want to develop that further, but what does E.ON want to dispose of in the medium term?

And question number three, how do you see the Turkish market? Is it still part of E.ON's core business? What's your current opinion on Turkey and your business there?

Resilience, Yes, briefly. As a critical energy infrastructure operator, we were asked to make our grids transparent and to make them geo-localizable so that every new investor would be able to look where they could connect themselves to the grid. As representatives of the industry, we criticized that. We said that this might not be such a good idea, but now it's too late. And the entire German critical infrastructure is available on the Internet and with geological data. We can't change this anymore, but anything that we're going to build in the future should not be visible.

As far as critical infrastructure is concerned, transparency may be interested or important, but I do believe there are many, many other interests that are more important and the legislation has to be changed. And I think this will be done in the future.

Now with regard to the Turkish market, these are at equity participations. In some cases, we own them together with a joint venture partner. We have one company is also listed at the Turkish Stock Exchange. It's not a core business, but these are operating units that are developing very well. We would well, enjoy them even more if this country didn't face such a high inflation rate.

Disposal program. We are pursuing our Portfolio Optimization Program. We are continuously reviewing our portfolio. We are planning to achieve EUR 2 billion in total. Of that, about EUR 1 billion have been implemented. And you asked about the -- some examples for disposals. Well, at the beginning of January, we sold our Czech gas distribution grid, but we're also looking at smaller divestitures, which -- in areas where we may not be the best owners and in cases where our disposal would create value for shareholders and would give us money to grow in other areas in which we would like to invest.

We're not under pressure. We are moving ahead opportunistically. And from a perspective of portfolio hygiene, we just ask -- have to ask ourselves whether the individual assets help us create value or whether others might be better owners than we are.

Mr. Bathke from Energate.

I hope you can hear me. I can't hear myself perfect. I have 2 questions. The first one goes to you, Ms. Jakobi. You criticized the economically viable regulation. If you look at the regulatory framework, a lot is being changed. What were you referring to? What is an economically viable regulatory framework? What are central aspects of such a framework?

Second question, Mr. Birnbaum, the network package. There is mention of individual grid connection processes. You mentioned the first come first serve principle that still applies and the regulations on the individual grid connection processes at distribution system level as it is now. Can you work with that? Do you have any ideas? And the transmission system operators have the maturity degree procedure. Is that something that you could also apply at the distribution system level?

Well, we are steering our investment program from EUR 43 million up to EUR 48 million. Our economic net debt also rose further. We would like to attract more private capital. And for that, we need an attractive regulatory regime. And it's not just one single component of the regulatory regime, it always depends on the overall package. And if I would have to pick one aspect, then I would like to mention that we have existing assets that have to be refinanced and the current proposal that is being discussed will not enable us to refinance our investments at market conditions. That's something, for instance, that should be insured in a good regulatory framework.

And I would also like to pick up your question and use it as an occasion to summarize what I tried to say in my speech. We only have 1/3 of the network, if you look at the kilometers, but we have connected disproportionately high amounts, 50% of the PV system, 60% of the strategies, 70% of onshore wind. And the redispatch topic is not an E.ON topic, but a transmission system operator, 78% with regard to the distribution system, it has a disproportionately high amount at E.ON or E.ON because we have the distribution system.

Now with regard to power connected, we are in a very good position to know what customers need. You talked about the maturity degree system for the TSOs. We believe that new criteria for connections are necessary. The maturity degree procedure of the TSOs would be a starting point. But for the 110 kV level, we would like to also take the requirements of final consumers into account, and we should not simply apply the regulations of the TSOs to the DSOs. Thank you very much.

Next, Mr. Schulte from WAZ Newspaper, please.

All the good questions were already asked. So I have another question. Mr. Birnbaum, how do you like what the German government are planning as far as the Heating Act is concerned? You are indirectly affected. And you've been saying for a year, we can do the transition, no problem. We will do it one way or another. The heat transition is the bigger challenge. So will that now decelerate the heat transition? Is it good that the level of 55% of renewables has been eliminated. So what do you think of the plan to bring in more bioquotas for gas and oil? That's where you come in. You as a gas supplier would need to ensure that the gas contains more biogas. Is that realistic? And what do you think about all of this?

Well, I think I said this in reply to Mr. Höning's questions. It's more than the Building Modernization Act as it's called out. There were statements on district heat in there on the supply and the funding instruments that are available. And then also the quota staircase and the buyer percentages. So a big package. As I said, to be honest, today, I cannot answer your question because it very much depends on the details at the end of the day, how positive or negative this will be for customers.

A quota can be too high or too low. It can be too bad for liquidity in the market. It can come too early or too late. So today, I cannot give you an assessment. Let me put it differently. It's great that we now have something on the table and now we can discuss it rather than speculate. We can talk about how to do what's on the table and developing in such a way that it works for climate protection and also for affordability. So I am positive and grateful that we now have something on the table we can work with. And whether it's positive at the end of the day, we'll need to see.

Okay. I think I was out of my room here when Ms. Höning asked the question. So apologies for that.

Well, with this topic, it does do no harm if this question comes up twice. I added a few things now the second time around.

One other question. So do you like the basic idea that the responsibility has shifted away from the consumers towards you?

Again, as a supplier, again, what does this shift of responsibility? What does it mean? What will the details look like? And well, I'll be facing that responsibility in 2 ways. I'm a gas supplier and I'm a gas network operator. What does it mean for gas grids? We had the discussion that we should switch off the gas infrastructure. So I cannot say off the cuff now what my take is on that. We need to look at it in detail or also ask what else do we need to understand for us to be able to give you a take.

Next, Annette Becker from Börsen-Zeitung.

Can you hear me? Okay. Yes. I have a series of questions as well. I would, first of all, talk about data centers and demand planning. Mr. Birnbaum, you just said that you did a study or had a study made 5 years ago that expected a totally different demand or build-out. Now data centers has only really come up in the last 1 or 2 years, and it has increased electricity consumption as well. How big is the risk that you are now wrong again with your plans?

And then back in March or in summer last year, you already voiced this threat that you would not continue to invest if the framework conditions aren't right. You said at the time that the rolling plans would be put on hold. And today, you're saying, okay, we will spend EUR 5 billion up until 2030 after all. So to what extent is the threat an empty threat? I do not fully understand that. And then at a totally different topic, the lawsuit, OLG Schleswig-Holstein Brokdorf, can you explain what that is about?

And then a technical question. You are adjusting your calculations of adjusted EBITDA and the group numbers. Could you explain or at least say how the numbers for 2025 would be had you applied this approach already for 2025?

Okay. Fireworks a question. Well, first, how good are forecasts. I've always said all forecasts are wrong. And whenever we have looked 10 years into the future, and I can go 10 years back, we were totally wrong, all of us always. That's why I do not believe in long-term plans. I do not believe in 5-year plans. They've never worked ever anywhere, and I don't believe in 10- or 15- or 20-year plans. But I do believe in planning over and over again in a rolling way to take another look at reality and adjust plans.

You cannot define a target picture which you want to achieve and then you don't look again in that 10-year period. That's why I welcome the monitoring when it came up because I said it's good to look at reality and to check what are we really observing regardless of what we would have wished X number of years ago when we did the plan. And I said, we should do this monitoring every 2 years. We should check again after 2 years.

And the second topic is we didn't have wrong assumptions. Our assumptions were too low. All of our assumptions were too low for PV, for wind, for heat pumps, for electric vehicles. And they were too low prior to the -- to Russia's attack on Ukraine, prior to the Easter package before the trucks, before the batteries. And even though we weren't wrong, we were too low in all of these segments. And nevertheless, we were told we need more networks or we were criticized for demanding more networks.

If we were to say now 5 years later, with a permitting period of 8 years, you should have built more. It's nonsense. We should have looked again and again what the reality is. And of course, the permitting procedures need to be accelerated if we need to deal with this discrepancy I mentioned. This demand has been made over and over again, and I said so in my speech as well. At the end of the day, I can say from E.ON perspective, distribution networks, particularly E.ON's distribution grids are a growth segment. We'll need more of that. And that's why we are investing so much. Now we come to the wrap-up.

And Mr. Jakobi, please.

Well, you're right, Ms. Becker, you described it correctly. We have now allocated EUR 5 billion more for the 5-year plan. But if you break it down to the individual years, then from 2024 to '28, we had a significant ramp-up, which we -- what we do with our new investment program is that we use the old plans and the numbers we had already defined for '27 and '28, EUR 10 billion. And now we are continuing that at the same level for 2029 and 2030. So our operating point was already directed at EUR 10 billion CapEx overall. And now we have indications suggesting that we increase that.

We don't have clarity yet, full clarity, but we also know, as Leo said, that we need these investments. They are politically desired. They make very much sense from a macroeconomic point of view. And to be -- to say now that we should reduce our network investments would be totally the wrong decision to take. And we have explained this in our annual report as well. The neutral effects that are due to the regulatory account will be cleared. Adjusted for these effects for 2025, we would have an EBITDA of EUR 9.4 billion, and that would be the reference figure.

And the last question was about Brokdorf, Leo.

Yes, sorry, the lawsuit there. I think the lawsuit was filed for the German government or the local government not being active. I think Schleswig-Holstein is where everything is more expensive and takes longer. Decommissioning will not work the way it's panning out now. And therefore, we have taken action, accusing the authorities of not taking action. It cannot be that we wait for the simplest things for years and at the same time, being expected to motivate the people and stay there at the site without being bored. So it was urgently necessary to take this action for failure to act.

In Grohnde, there's almost the similar of the same design in Lower Saxony or what we did at Isar, what we dismantled there. And in Brokdorf, we just filled out forms and elsewhere during the same period, we dismantled thousands of tonnes of plant. Schleswig-Holstein did very good things. Mr. Goldschmidt, the Environmental Minister did a lot of good things in terms of network connection regime. It contains a lot of good things, but it's a very good document. I would subscribe to that. But in that area, his ministry is simply not delivering.

Okay. We can discuss this bilaterally later on. We have further questions. So looking at the clock, I suggest we won't forget that question. I promise you, but let me go through the list here. Ms. Weikert is next and then Mr. Käckenhoff from Reuters and then Mr. Rasch from NZZ.

Mr. Weikert first, please.

Yes. Thank you. I would like to know what progress is being made in your talks with the regulators. So are you confident that more investment will be possible going forward? Maybe you can report on that.

And then the EUR 5 billion to EUR 10 billion headroom, Mr. Jakobi, what will you do if the prerequisites are not right or are not the way you would wish them to be? What will happen with the money, then there are 2 other areas you could invest in. Would the money be invested there then instead? Or what will you do with that EUR 5 billion to EUR 10 billion?

Well, we are basically optimistic that when something is really needed that the right rules will be put in place for them -- for all of this to be implemented. But we are not willing to disclose anything on the bilateral talks we've had. We are having constructive discussions in the relevant communication channels. That's all I can say.

And then I'd simply like to add to that. We have a very high demand and we already said at the last press conferences that the network plan would justify much more investment or we could connect a lot more than we are connecting at the moment. We have waiting times for customers that don't have preferred access. So we could connect a lot more. So our main focus would be on the organic increase of network investments. And since we are confident that we will have positive regulation at some point in time, that's our plan A.

Okay. Tom Käckenhoff from Reuters.

Could you please elaborate on the outlook concerning the figures that have been adjusted? In the text, you say that you are expecting stable earnings, but the figures that you were stating are below the figures of the previous year.

Well, that's what we just mentioned in the context of the last question. Our earnings have been adjusted for the neutral effects that 2025 -- of 2025, they've been adjusted for them. They've been corrected. And as a result of that, we are going to achieve the EUR 9.4 billion. And based on that, we're going to -- we are expecting a stable result.

But what are the figures of the previous year?

Well, that is the figure. This year, we are at EUR 9.8 billion in terms of EBITDA but that already included at the beginning of the year, we said that neutral regulatory account effects of EUR 200 million are included. They were even higher by the end of the year because of higher amounts distributed in Eastern Europe or grid loss recoveries from the previous years. They -- these factors -- well, in the past, we always talked about regulatory account effects. These will be adjusted for in the future.

And for this pro forma figure for the sake of comparison, we have adjusted them. So the unadjusted figure is the EUR 9.8 billion. The adjusted figure adjusted for the neutral net effects for 2025 is EUR 9.4 billion.

Let me add the investors asked us to do so. We always -- well, we used to say, well, it was better than previously assumed because we had fewer losses in Eastern Europe, grid losses. And then the next year, we had to say that it was slightly worse because what we had achieved in the past or received in the past was not available now. So we always had to explain why the earnings figure went up or down. And then, well, when we exclude this regulatory aspect, that was only really a time matter, what is the actual curve.

And now we have 1 year in which we used both tracks, both ways. But next year, we will only have one E.ON figure without any adjustments. But I would like to apologize for the fact that we created this confusion this year because this year was a year in which we changed the approach. But that was a request that we received from the market. And it's also in line with what our main competitors do, such as National Grid.

Mr. Rasch from Neue Zürcher Zeitung.

I'm from the digital financial magazine, Der Markt, we're a magazine for investors. And that's why I would like to ask the following question.

If I look at the free cash flow as analysts report free cash flow, you have a negative free cash flow for 2025 of more than EUR 1 billion. 2026, this figure will even be negative EUR 2 billion, and that it's going to continue. You described your investment program, which is very extensive, and you have a good return on this investment program. But until 2030, if I look at the plan, do you expect that the free cash flow is going to be positive at some stage? What are your prospects in this regard?

Well, we explained that we are a growth business. And if you want to grow -- well, we are growing, but although we are free cash flow negative, we are achieving our KPIs. And now considering the earnings increase, are we also going to manage to finance our increasing debt. You're right, we are a growth business, and we will still be free cash flow negative. But because we are planning to increase earnings substantially, we are still going to be able to meet the rating figures despite the negative cash flow.

Is there any horizon, any time frame? Do you know when you're going to be free cash flow positive?

Well, we have a good portfolio of businesses. We have an energy retail business that generates a very good cash flow. And on the other hand, we have strongly growing businesses in the area of networks and Energy Infrastructure Solutions, which will be financed by the high cash flow from the energy retail business. Based on our current plans, we do not expect that we're going to be free cash flow positive. But if growth would not be that fast in the future, we may have that situation in the 30s. But currently, we rather see this as a positive quality. It's good for us to have the opportunity to invest in the growth businesses.

And this brings me back to regulation. The additional investments need to generate earnings. We can't increase debt with a negative cash flow without generating good earnings. You have a good point. But it's one of our KPIs and one of the KPIs used for steering. We are steering the cash conversion rate, and we also communicated target figures to the capital market.

That's the operational performance of our business. Operating cash flow is to be 100%. So the EBITDA that we are guiding is fully cash effective. And that's really all I can say about this.

Thank you to Hamburg. We still have one last question in the virtual room from Mr. Haas, from Westdeutscher Rundfunk.

I have 2 questions, Mr. Birnbaum. Last year, we talked a lot about smart meters. And I would like to ask you how you see the current development.

And secondly, we also talked about Brokdorf and Grohnde nuclear power plants. And in many countries, nuclear power is facing a renaissance, but not really in Germany. If -- do you see any investments there if this industry becomes more important? Would you think that at some stage, we would -- we will have 2 or 3 nuclear power plants in Germany?

I'll answer the second question because I can answer it more quickly. The answer is a lot is happening, but nothing in Germany. I am very sure that there will not be any private investor who's going to build nuclear installations in Germany. You can discuss this at length, but private investors need 40 years of reliability, and we don't have that, and that's why nobody is going to invest in Germany. Now I forgot the first question.

The first question related to smart meters.

Oh, yes, I'm sorry, I apologize. The second one, I lost track. The smart meter rollout, and I already mentioned that the smart meter rollout continued as planned. The rollout rate of 20% was exceeded in all areas. We built 0.5 million additional smart meters in Germany. We're going to achieve 1 million in Germany now. And I don't know whether the entire industry achieved that, but I would like to say that for a country that is as large as Germany, 1 million is very sad. 1 million were built in Warsaw in 2 years, 1 million can be built in Sweden in 1 year or 2 years at the latest.

And I was criticized that in Germany, we chose the most complicated and slowest smart meter rollout driven by the most expensive and most complicated regulation worldwide. There's no other regulation that's more complex than the one in Germany worldwide. We made a lot of suggestions. None of them were implemented and now we are where we are. We're doing this rollout, but it's not fun.

Thank you very much, Mr. Haas. That's the last question on my monitor. With this, I would like to close the balance sheet press conference for this year. Thank you very much for joining us. I would like to say goodbye to our colleagues in the virtual room and do hope that some of the colleagues who are in the room will stay with us and look at the exhibition mentioned by Mr. Birnbaum.

We also have some snacks for you, and you'll have the opportunity to exchange and discuss if you have any questions throughout the day, my team and I will be available any time. Thank you very much for coming and many greetings to the virtual room. Thank you very much.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Hello, everyone, and welcome to our 9 months 2025 results call. Thank you for taking the time to join us today. I am here with our CFO, Nadia Jakobi, who will give you an update on our financials. As with every occasion, we will leave enough room at the end for your questions.

With that, over to you, Nadia.

Thank you, Iris, and a warm welcome to all of you from my side as well. Before I turn to our financials, I would like first to touch upon the latest regulatory developments in Germany. The German regulator has announced the start of the final consultation process concerning the framework concept with a committee of representatives from regional regulatory authorities. Compared to its draft proposals published in the summer, the regulator has introduced amendments to certain items, most of which affect smaller network operators.

The main aspect for us is that the regulator intends to maintain the 7-year average approach for determining the cost of debt on the existing asset base without annual adjustments. This fails to consider that maturing debt must be refinanced at current market rates. The proposed higher weighting of years with higher investment is a step in the right direction, but it does not solve the problem as the average would still be below current market rates. Consequently, the current draft of the framework does not fairly reflect grid operators' financing cost.

Allowing for an annual adjustment would have ensured a more appropriate reflection of actual market developments for both customers and grid operators. The proposals are still in draft format, and so far, we have only seen a brief BNetzA release. However, the regulator has indicated that the current version is close to final and plans to keep its year-end target for finalizing the framework and the methodology on capital returns and efficiency benchmarking.

However, the final values for return on capital will only be determined much later in the process between 2026 and 2028 as was the case for former regulatory periods. Given the status and recent announcement of the regulator, specifically for the cost of debt treatment, the uncertainties regarding RP5 are greater than we had expected by now. We would have expected to be able to narrow down the ranges for capital remuneration further. As we have always said, ultimately, the RP5 proposals as a whole must be sufficiently attractive to promote investments.

In his latest announcement, the regulator stated that the new Nest proposals will increase the revenue cap by 1.4% or EUR 1.3 billion for power DSOs during the next regulatory period. The regulator must now move from words to actions as we do not see the necessary increase of the regulators' returns so far in the publications.

In view of the enormous investment needed for a successful energy transition, we, however, remain confident that the final result will deliver the outcome needed. But we would have expected to have more clarity already at this first stage of the process to invest further investments in detail. We will continue to advocate for an internationally competitive market-based regulatory framework that supports a successful energy transition in Germany. At the same time, we remain committed to our value creation promise and will only invest provided regulatory returns create value for our shareholders. I'm sure we will continue this topic in our Q&A, but let me now turn to our financial results for the first 9 months.

There are 3 key messages I want to highlight. First, in the first 9 months of the year, we achieved an adjusted EBITDA of EUR 7.4 billion and an adjusted net income of EUR 2.3 billion. This represents a year-over-year increase of 10% and 4%, respectively. Based on our full year guidance, that means that we have achieved roughly 76% of our adjusted EBITDA and 78% of adjusted net income at group level.

Second, our investment-driven earnings growth and strong operational execution remain the key driver of our sustainable growth. Our planned investments have developed well with a year-over-year increase of 8% at group level. The main share comes from our Energy Networks business. This shows that our long-term procurement strategy, including our highly skilled workforce, enables us to successfully execute our networks investment plan.

And third, based on our 9 months economic net debt outturn, we expect our debt factor to come in at around 4.5x economic net debt to adjusted EBITDA for the full year 2025. Our balance sheet continues to provide a strong foundation for our investment plans.

Let us now move on to the details of our 9 months year-over-year adjusted EBITDA development. The increase in EBITDA was largely driven by our Energy Networks business, reflecting accelerated investments in our regulated asset base across our regions. We continue to see a substantial contribution to our earnings growth coming from value-neutral timing effects. In Germany, the positive timing effects were driven by increased volumes and lower redispatch expenses, primarily during the first half of this year.

In Southeastern Europe, we continue to see additional network loss recoveries and volume effects. We don't expect significant impacts from value-neutral timing effect in Q4 2025.

Turning now to our Energy Infrastructure Solutions business. EBITDA growth was driven by higher volumes due to normalized operations and weather compared to last year. On top, we saw business growth from new projects coming online and increased smart metering installations in the U.K. Our Energy Retail business delivered in line with our expectations. The usual operational year-over-year development in Germany is masked by phasing effects from true-ups for volume and price assumptions and by restructuring provisions in connection with our efficiency programs. However, the decline is partially balanced by temporary price effects from earlier this year.

As already communicated in our H1 call, the earnings development in the U.K. continued as anticipated and is already fully reflected in our guidance. In our U.K. B2C customer segment, we continue to see customers switching from SVT tariffs to fixed-term tariffs. In our U.K. B2B business, contracts from previous years continued to roll off.

Our 9 months 2025 adjusted net income came in at around EUR 2.3 billion. The conversion of the operational growth into the bottom line came in as expected. We observed slightly higher depreciation costs, driven by increased digital investments with shorter useful lives. Interest costs rose due to the higher coupons compared to maturing debt as well as higher debt levels relative to prior years. In addition, the positive value-neutral timing effects mainly came from our Southeastern Europe network business, which has a higher minority interest.

Let us now move on to our economic net debt development. The execution of our investment program remains strong. In our Energy Networks business, we saw a 15% increase in year-over-year investments. Our group CapEx fill rate now stands at around 60%, which is in line with our typical 9 months level. Our economic net debt improved by roughly EUR 2 billion in the third quarter. The main driver was a strong seasonal operational cash flow. In addition, there was a positive structural effect of around EUR 700 million coming from the deconsolidation of one of our regional utilities participation in Germany NEW AG at the end of September 2025.

In the third quarter, we also benefited from a tailwind in pension obligations, which decreased by a mid-triple-digit million euro amount, mainly due to the rising interest rates between the end of Q2 and Q3. We have also continued to streamline our portfolio as part of our discretionary EUR 2 billion disposal program. Most recently, we announced that we have signed an agreement to divest our Gas Networks business in Czechia. This step enables us to continue pursuing our ambitious growth and investment goals.

In summary, our robust E&D trajectory continues to support our confidence in maintaining strong balance sheet flexibility to finance our ongoing investment program. At year-end, we expect our debt factor to come in at around 4.5x economic net debt to adjusted EBITDA based on the current interest rate environment.

Finally, I would like to conclude today's presentation with my key takeaways and outlook. First, we have delivered strong 9 months group results and are well on track with our investment ramp-up. Our strong balance sheet provides a solid foundation for continued organic growth. Second, on our outlook. Our 9-month performance supports our 2025 earnings expectations. In our Energy Networks segment, we continue to expect to reach the upper end of the guidance range, driven by value-neutral timing effects. This also positions us at the upper end of our group EBITDA guidance range for the full year 2025.

For our adjusted net income, we still expect to land comfortably within our guidance range. With that, we fully confirm our full year 2025 guidance and 2028 outlook, including our dividend policy.

With that, back to you, Iris, for the Q&A.

Thank you, Nadia. And with that, we will start our Q&A session. [Operator Instructions] And we will start today's call with a question from Harry Wyburd from Exane.

So I'll keep my regulation too. So firstly, can I just dig into some of the comments you made on regulation. So noted on the point on cost of debt allowances and your disappointment with that, but you also mentioned that you're confident you will achieve in the end, an agreement that works for you. And you also mentioned you are confident that you are -- or more confident that you'll get the consultation documents by the end of this year. Can you just tell us what a good outcome would look like in those documents you're expecting by the end of the year? It sounds like you're less optimistic about cost of debt allowances. What else could offset that potentially? And what is your latest thinking on where you think operating cost allowances will come out because a few of your criticisms of the regulation were centered on cost allowances.

And then the second one is on consensus for next year. Given that next year, you will no longer be reporting timing effects in your headline earnings. Are you comfortable with the current consensus for next year, which I think stands at around EUR 1.08. If you could give us a flavor of how you're feeling on that, that would be very useful.

Harry, thanks for the questions. I think on the question on outlook 2026, we give the outlook for 2026 at our full year results for 2025. And I will now not give any glimpse into our 2026 numbers. But just, of course, we are, of course, following the consensus always very carefully.

So coming to the first question. So first of all, the regulator has announced that he sees the draft as largely final, and he keeps the year-end time line for the framework for cost of capital and efficiency. Compared to the summer draft, the regulator added amendments and improvements, but those were mainly affecting the smaller DSOs. You might have seen that the simplified that -- also the DSO and the simplified procedure can now get the OpEx factor.

For us, as you highlighted, the key negative point that we have seen so far that the 7-year average without dynamic adjustment is still kept. And honestly, also the weighted average that has now been introduced is not helping that much because we have been also ramping up our investments faster than the industry because we got our ducks in the row on supply chain at a faster pace to enable the energy transition. And as you know, we are sort of connecting 80% of all onshore wind, for example. That's why we have been ramping up far faster than some of the smaller competitors.

So the latest statement on this cost of debt rather confirms a bit of unease that we have highlighted in our H1 call. But we, of course, continue to advocate for competitive and market-based regulatory framework. So I don't see that there will be now massive changes compared on this cost of debt discussion until the end of the year. But of course, the overall regulatory package must be attractive enough to encourage further investments.

So if you ask me, the problem is, at this point in time, we only have seen the press statements of the regulator. In the press statements, the regulator has clearly articulated that he sees that the revenues will structurally increase by 1.4%. But however, we haven't seen that now in the publications. And also, we don't have the final draft in our hands. That's why it's now very difficult for me to sort of point you to the 1, 2, 3 positives in the publications, which might come until the end of the year because I currently don't have more information than is publicly available.

On operating cost allowance, maybe just one word. Of course, operating cost allowances, that was always clear that everything that is -- in regard to efficiency benchmarking and operating cost allowances, that was always clear that this will only come at a later point in time in the regulatory period.

We move then on to the next question. The next question comes from Deepa from Bernstein.

So I think my question is actually continuing on the theme of regulation, but maybe a bit more specific, Nadia, based on your best understanding from your regulatory team. So the new period starts in 2029. So are we talking about like a weighted average cost of debt from -- averaging period from '21 to '28. That number is calculated. It's then fixed and just applied for all the -- I think it's going to be only one RAB, right? So for the opening RAB, new investments, et cetera? Or is there at least going to be some level of dynamism for the new CapEx that's added on from 2029 onwards? So that's my first question.

Second question is a bit related. Obviously, when you will be presenting your full year results in '26, you're going to give us guidance for '26, but there's also an expectation that maybe you will roll your plan forward and give us some updates on CapEx. So my question really is, do you think you and the Board will have enough certainty about the investment conditions by Feb '26 that will allow you to make a decision on whether to keep the CapEx numbers as they are or use some of that headroom in your balance sheet? Yes. So those are the two questions.

So Deepa, you're touching upon some very relevant points. So we -- so first of all, to clarify the second part of your first question, it is very clear from the current proposals that for the new investments that start from 2027, there will be this dynamic adjustment in the cost of debt that we already have in this fourth regulatory period. So that's something which is continued and it's also then working that we get our actual financing cost reimbursed.

Then when it comes to the currently existing asset base, like you highlighted, it is a 7-year average, and this is then fixed and not dynamically annually adjusted for the maturing debt. And what we don't know at this point in time is what years are part of the time series. And that is, of course, very relevant because, as you know, at the beginning of the '20s, we still had this very low interest rate years, and it is very fundamental, which years are being part of this 7-year average. And that is something we don't know, and it is also not clear if we know at the end of the year.

And this also applies, for example, for the risk-free rate that is for the new investments as part of the cost of equity determination. We also don't know which years will be included in that calculation and some of the other elements that are part of the cost of equity for sort of the new investments.

So that then also leads me to the second part of your question. As we highlighted, we would have expected to have more clarity around the methodology at this point in time to be able to narrow down the corridor of potential outcomes. I think that is what I've been also saying the last couple of quarters that the methodology and that methodology, of course, includes also what kind of years are included, et cetera, would help us to narrow down the corridor of potential outcomes. And what I know right now, that has become less likely at this point in time.

So when it now comes to what we will do in our full year, the regulator has clearly articulated and signaled that we will have higher revenues, but we haven't seen it yet. So that's why we will first now wait for the proposals to come. Currently, that's a closed shop exercise within the regulatory authorities and the regional authorities. And once we have now then assessed the final proposals, we will then make up our base case, and we will update you accordingly. But for now, it's too early to comment on our full year communication.

With that, we get to the next question, which comes from Peter Bisztyga from BofA.

So sorry to kind of labor the point on regulation. But what I'm sort of hearing is that the cost of debt aspect isn't adequate and it's probably not going to change very much. You've been sort of clear that you want 8% plus ROE. And if you look at the methodology to date, I don't think there's a chance that you're going to get anywhere near that. Dispatch costs are still included in the efficiency benchmarking. So there's a whole list of stuff that you've been quite explicit about the fact that you don't like. And the revenue increase, the sort of 1%, whatever it is, just isn't very much in the grand scheme of things. So how can this get anywhere near to being a sort of sufficient overall package based on what you have said are your kind of minimum requirements? So that's my main question.

And then maybe just one -- just on a slightly different topic. Your customer numbers in Germany and the U.K. In Germany, you sort of lost quite a few in the first half, but it seems to have now stabilized. And in the U.K., you're sort of losing a few -- 100,000 or so customers this quarter despite, I think, sort of quite aggressive pricing. So I just wondered if you could comment on what dynamics you're seeing in those 2 retail markets, please?

Yes. So let me start with the first part of the question. So maybe starting with the last comment. The revenue increase of 1.4% is only the structural elements, which would lead to this 1.4%. All the market-related elements, i.e., sort of higher interest rates, both affecting sort of cost of debt and cost of equity and of course, all the increase about sort of more investments, that is not included in this 1.4%. But it is just sort of structurally making it more attractive that is included in that.

Second part, the determination of the new regulatory period, which starts in 2029 has always had like 4 years. So '25, '26, '27, '28. So what we are now saying in this first part, what we see up in 2025 and what we would have hoped for to get clarity in this first year and the one-off of the next regulatory period, this is disappointing from what we have known right now. But of course, we will have 3 more years with all the individual determinations to come. And with all the investment needs actually building up, we are still confident that the regulator will see the need for investment and will also then improve on that.

To highlight one topic you have now set around cost of debt, we discussed that. As a positive, which is currently not clarified at all is the OpEx factor. This has been just laid out without making it any more concrete, which should clearly be a positive. You mentioned the redispatch cost. We haven't so far seen anything and also no communication on how the efficiency framework and the benchmarking is going to work. And there, we also still see clearly the potential for improvements. However, so far, we haven't seen it in any of the publications. And so -- as I said in my speech, the regulator now just after he had his words that there will be structural improvements, we will also now see that is actually the actions are also coming.

And customer numbers. So customer numbers, yes. So I think we covered the drop in customer numbers in the first half of the year. And we highlighted in the last call that we are targeting around 47 million customers for our overall customer base, and that is absolutely unchanged. We are pursuing value over volume strategy. So clearly, it's not only the customer numbers, but also the value per customer is what is relevant for us. So we are absolutely sort of keeping to our guidance for the energy retail business for 2025 with a target range of EUR 1.6 billion to EUR 1.8 billion, and that is fully confirmed. And we have been also saying, I think if you remember, as part of our Q1 call that some of the customer acquisition campaigns will be rather tilted to the back end of the year and some of that, you are also now seeing in the market.

With that, we go on to Piotr from Citi.

I have two questions, please. So the first one on this EUR 5 billion to EUR 10 billion extra CapEx headroom that you previously discussed. So assuming the German regulator doesn't provide you the required package, is it possible that you redirect this potentially into other markets? Essentially, what I'm trying to get is, shall we think about this EUR 5 billion to EUR 10 billion that is more likely or not that it will come and be spent somewhere within your structure into different regions? So that's question number one.

And the second question I have on the supply margins outlook into the next year. What is the procurement prices of a commodity component doing on your books? Is it -- should the customers expect declining prices or flat prices? And what that -- does it have any implication on the supply margin you can generate?

Yes. So on this EUR 5 billion to EUR 10 billion headroom that we have. And I think if you remember, Leo, I think, gave some highlights about where we're investing in our international networks business in the H1 call. And there is very clearly also a need to grow in other regions because particularly also in some of the other regions we are operating in, we see a higher economic growth than we actually see in Germany. And there's quite a lot of connection requests also for industrial customers. I would just point you to some of the examples that Leo has given as part of his speech in H1. So there is clearly the need for growth also in our international and European businesses.

Second point, in Germany, there is this clear investment need. We're also already -- at this moment, our demands and needs for investment by far exceed what we can actually include in our plan. And that's why we are saying, as I already highlighted to the question of Peter, that we say because the investment needs are there that eventually we will get a good framework in Germany. So I guess, as you indicated, this EUR 5 billion to EUR 10 billion in headroom clearly earmarked for organic growth in our business.

Second question was regarding the supply margins. Yes, procurement strategy is, of course, more commercially sensitive topic that I will not now share with the whole investor community. I guess, what you know that some of the prices in the U.K., the procurement strategy can be very easily followed by the price cap regulation. So I would point you to that. And in Germany, except from the commodity element, you, of course, know that we have seen quite some reductions in network grid fees with the subsidization of the German government of the TSO grid fees by EUR 6.5 billion, which will now also feed through into the tariffs and the same applies to the cancellation of some gas levy. But I guess that would be what I can sort of share with you on this point. So clearly, some elements where affordability concerns -- where we will see that some of the affordability concern will be dampened, particularly in our biggest market, largest market, Germany.

And then we have another question from Louis Boujard from ODDO.

Maybe two on my side. Maybe the first one would be regarding the timing actually for the new investment plan that you expected. We understand that indeed, the debt factor is not at the level that you wanted, that there is some uncertainty still in the OpEx and in the framework that is currently under discussion. What does that mean if you're not able by February to update and to increase your CapEx plan? Does that mean that it's going to be over? Or does it mean that eventually there is other milestones that you could foresee in the future in the next quarters after February on which we could rely on in order to have a better visibility and better grip regarding the potential upside into the CapEx plan?

And also as a side comment on this question, do you, at the same time, see potential for additional investments in digitalization, smart meters, et cetera, that would enable you eventually to grab additional returns on the networks without relying too much into the regulatory framework? That would be -- sorry, the first question, a bit long.

Second one would be much shorter. On the Retail segment, our EBITDA declined by 18% on the 9 months. Well, we know that there is some normalization effect, but could you eventually elaborate on a geographical standpoint, what would be and if any corrective measures might be needed in certain geographies on which eventually the drop is a bit larger than what you could have anticipated previously?

Okay. So let me come first to your first question. So additional smart meter investments is always a good idea. So particularly, we are investing in smart meters in the U.K. and Germany. And I think we have been the ones who've been always fulfilling their targets. In Germany, we have reached a 20% increase. But of course, smart meter investments is something which we can do, but is not, of course, in any size equivalent to the RAB investments that we do.

When it comes to the timing, I would need to say that we don't want to speculate now. We have so far only got sort of what was uploaded onto the website of BNetzA and one interview of Handelsblatt of Mr. Muller. We have this clear announcement that we will see increases or improvements to the regulatory on top of the market-driven improvements. And that's why I don't want to speculate now what we will do. We will first make up our mind what we will do for the full year 2025 announcements.

So when it comes to the Q2, so the retail business, yes, you're right. As I've been highlighting, we are sort of EUR 300 million below last year in 9 months. We achieved EUR 1.4 billion, and we are sort of following the normal seasonal pattern and are on track for our full year guidance. Q3 stand-alone EBITDA was EUR 120 million. That was down from last year. That was mainly due to phasing. We actually put in some cost provisions for restructuring and some normalization effects across the markets.

So we have been really seeing only now some shifts between Q3 and Q4. Overall, the H2 results are very much in line with what we have been also seeing in former H2s because you need to bear in mind that H1 usually is the stronger of the 2 halves of the year for us.

Yes. I think particularly Germany is a bit hard to interpret because last year, we had the positive true-ups from the reconciliation between actual and planned consumption in Q3. Now we will rather see some true-ups in Q4. And we are really managing also the overall -- we are managing the results in the retail business on a full year basis and not so much on a quarter-by-quarter basis.

And with that, we come already to our last question for today, which comes from Ahmed from Jefferies.

Nadia, it sounds like from your comments that there is still quite a bit of a gap on key parameters, regulatory parameters between E.ON's position and whatever visibility that you get from the regulator. But then you've also referenced that you think in the end, you sort of feel that there will be the 2 sites will sort of come together. Could you just talk a little bit about the process? So if we get the consultation documents by year-end, and there is still a substantial gap between E.ON's position and what it sees as a regulatory proposal, what recourse measures do you have? Are you able to challenge it? Is there a way to sort of take it to an appeal? And how long could that process be? So I just want to understand a little bit more how do we -- what could be the process from there onwards? That's my number one question.

And sorry, my second question is, could you give us some sense of how significant the changes could be to the cost outperformance methodology? Because my understanding is that is quite an important element in terms of when we think about sort of the German regulation.

So Ahmed, as I highlighted earlier, at this point in time, we have only sort of the announcements from the regulator about the draft proposals that has been sent to the final consultation of the committee of regional regulators. And we don't have that yet. So for us, sort of the first step would be that we assess these publications once we have made them available. And then once we have fully analyzed that, we will assess our options. And as always, we also assess potential legal options that we have.

But we will, of course, only do that once we have the information in place. And as the regulator has highlighted, they deem that these drafts are largely final and that they will keep the year-end time line for the framework. So we are pretty sure that we will have them in the next couple of weeks.

The final decisions on the cost of debt and cost of equity are expected between 2026 and 2028, as I highlighted, and the efficiency values for RP5 power will be defined in 2028. So you're right. To summarize it again, you're right regarding the gap to our position versus the regulator. But keep in mind, it's now the framework and determination will only happen over the next 2 to 3 years. Yes.

Very clear.

And then the second question, when it comes to outperformance, it is an incentive regulation that we have and it's a potential for outperformance. I highlighted it earlier, and there's now a new element that is also coming in. So we have got the benchmarking and sort of the efficiency values that we get is also very clearly determining what kind of outperformance that we have. That is something which we will all know at a very later point in the process.

Then the OpEx adjustment factor, we cannot really tell. I guess, on the OpEx adjustment factor, I would hope that we get some more clarification in 2026. There was a bit more push down the line. Sort of even -- currently, we don't even know what the methodology about that is. But okay, what the OpEx factor will actually mean for us, we would also only know at the back end before we actually get into the regulatory period.

I guess that's all I can say on the outperformance right now. Of course, there's always a link between outperformance, OpEx factor and all the other return elements. And as we say, for us, the overall package regarding all elements is actually what counts. In this regulatory period that we are currently in, we managed to achieve a value creation spread of 150 to 200 basis points over all our Energy Networks businesses. And also our German business is living up to this value creation spread. And that's, of course, our ambition that -- and our goal to also achieve this value creation spread in the future.

And with that, we come to the end of our 9 months results call. Thank you very much, everyone. And if there are any follow-up questions or you would like to go into more details on the one or the other point, the IR team is happy to take your questions later. Thank you very much for dialing in and speak soon. Bye-bye, everyone.

Bye-bye. Thank you.

Good morning, everyone, and welcome to our H1 2025 results call. I am here with Leo and Nadia, who will present our half year results. As with every occasion, we will leave enough room at the end for your questions.

With that, I hand immediately over to you, Leo.

Thank you, Iris. Warm welcome to all of you also from my side. Today is a special reporting day. It coincides with E.ON's 25th anniversary. We are really proud how we have successfully repositioned E.ON over the last years. We are a completely different company from what we have been 25 years ago or even 10 years ago. And as a result, we can credibly claim that we are the playmakers of the energy transition. But that said, we are not making a big fuss around this birthday because what truly matters, what truly matters to you is not the past, but what we deliver now and in the future. And therefore, let me get straight to my 3 key messages for today.

First, during H1 '25, we delivered both operationally and financially, and we remain fully on track for our full year guidance. Second, we are in a crucial phase of the process for the upcoming fifth regulatory period for power in Germany. And while we acknowledge some positive aspects of what we have seen so far from the regulator, overall, we see the need for significant improvement. And third, our resilient growth story will continue well into the 2030s. And this is driven by the transformation of the energy system, not only in Germany, but across Europe. We see strong demand drivers also in our non-German markets, which all highlight the strength of our strategic growth story that we have also shown over the last years.

On my first message. Our H1 results came strongly with an adjusted -- it came in strongly with an adjusted EBITDA of EUR 5.5 billion and an adjusted net income of EUR 1.9 billion. CapEx-backed growth continues, up 11% year-over-year. And with these numbers, we are fully on track for our full year guidance, and Nadia will later provide you with more details on our financial delivery.

I would like to use the opportunity to highlight some of the outstanding examples of our consistent strong operational performance. We have to deliver against continued high demand in connection requests. For example, we continue to massively connect photovoltaics, PV. Today, and I've mentioned that number already in the past, 28 gigawatts of solar capacity are connected to the grids in the federal state of Bavaria only. And those 28 gigawatts are matching Spain's total solar capacity or nearly matching Spain's total solar capacity of 32 gigawatts. And most of that solar capacity is again connected to the grids of our local DSOs in Bavaria, Bayernwerk and Lechwerke.

But what is important, you can't connect such an amount of renewables without upgrading and fundamentally changing the whole grid behind the connection points. That means we had to upgrade our whole grid with a priority on stability and steerability. We are also standardizing all connection processes in Germany and handle them with our proprietary digital platform. This is best-in-class and enables us to significantly improve the time we need to process connection requests for default cases from 22 days as in the past to under 24 hours. However, if we hit bottlenecks, which we increasingly do, then we can't upheld the 24 hours.

In H1, we also made great progress in the digitization of the German energy landscape. For example, we have now built a complete digital twin for our 700,000 kilometers power grid, which is based on one central data platform. And we have done this using our envelio technology platform. And envelio is clearly the market leader for smart grid software in Europe, and we can now calculate real time the capacity and the utilization of the low and medium voltage grid to define, for example, available capacities across all our German DSOs. And this is one of the instruments which enhances our ability to allocate resources and manage grid stability.

Lastly, let me do one comment on supply chain management. We continue our journey of standardization and forward planning. Most recently, we communicated a new procurement initiative for core grid components totaling EUR 6 billion. As part of it, we have entered into multiple capacity reservation agreements for transformers, which is one of the critical grid components and that we have done with suppliers of Hitachi Energy, Siemens Energy or Koncar. The agreements with these 3 companies alone secure deliveries worth up to EUR 3 billion with contracts up to 2033. Such agreements support our ability to make investments, they reduce cost and they dampen inflationary pressure, and they help actually the supplier industry to increase their capacities. Consequently, we currently see no major procurement barrier to a potential ramp-up in CapEx. So much for the operational performance examples in Energy Networks.

Let me add a few from the other segments. In Energy Infrastructure Solutions, we recently announced a strategic partnership with the data center operator, CyrusOne. We are designing a local power generation and cooling system to deliver up to 61 additional megawatts of power to Frankfurt campus, setting a new industry standard. So what it does is it allows CyrusOne to build a larger data center than they would be able to build based on the grid connection alone.

In Energy Retail, the commodity business is performing as expected. Despite volatile wholesale price and challenging weather conditions, our risk management has ensured stable financial deliveries. And here, we have also continued to push forward with new customer-centric innovation, for example, our Home & Drive tariff in Germany, which allows EV owners to charge intelligently overnight integrated with the E.ON Home app. It gives customers seamless control over their energy use and similar propositions are being rolled out across our core markets.

To summarize, let me repeat the points of my first message -- the key points of my first message for you. We are financially on track, and this is not by chance, but driven by operational excellence. And the examples also show that digitization is happening across the board at E.ON. And with that, let me turn to my second message for today, the regulatory process for German power distribution, starting 2029.

In the recent months, the German regulator, the Bundesnetzagentur released drafts for important parts of the future regulatory framework for the RP5. We are still in the consultation phase, which will end within the next week. Overall, we do see that the regulator acknowledges that we are in a different situation compared to 10 years ago. And we see some positive signs in the draft. For example, the WACC model is the correct approach towards simplification and a better linkage to the general market development for capital return also points in the right direction. However, we are not there yet.

Unfortunately, the current proposals still fall short of both industry and investor expectations. They fail to create the financial conditions needed to attract additional capital, especially when compared to countries like the U.K. or the U.S. where grid investments is actively incentivized. And why is that the case? As you know, regulatory returns in Germany stem from the return on capital employed and the possibility to achieve operational outperformance within the incentive framework. Nadia will comment in more detail on why the proposals on the cost of equity and the cost of debt are still insufficient. I would like to outline our key concerns regarding the proposed chances to efficiency benchmarking. And let me share our view and arguments on how the proposals could improve.

One key concern is the breadth, the multiple changes of the planned simultaneous methodological changes. The reduction in benchmarking methods applied, a shorter period for addressing inefficiencies and an expanded comparison group disadvantage exactly those grid operators who invest heavily today in network infrastructure compared to those who do significantly less. The other critical issue for us is the inclusion of the redispatch costs into the efficiency benchmarking. These costs are concentrated among a few DSOs, especially in the regions under the greatest strain from rapid renewables expansion. Including redispatch cost penalizes grid operators who are doing the most to advance the energy transition.

And let me illustrate that between 2020 and 2024, our Northeastern German DSO E.DIS, invested around EUR 1.4 billion into its power networks and integrated nearly 4x as many generation units as in the last -- in the 20 years before. E.DIS is not an exception at E.ON because E.ON predominantly operates in rural areas where demand for renewable connection is higher. As a result, in 2024, E.ON DSOs incurred approximately 80% of the redispatching costs across the entire German distribution grid. It's obvious a municipality of Berlin has no redispatch cost because they have no renewables.

But we have the renewables, so we have the redispatch cost. They are the result of non-market-based build-out plans for renewables without due consideration of existing infrastructure. They are not the result of poor planning on our side and treating them as controllable whilst they are not -- is economically and legally incorrect. As a last point, full inflation compensation for OpEx is essential. We cannot understand the proposed 2-year time lag, which lacks in our eyes, justification and undermines the credibility of the regulatory framework.

Summarizing, to attract additional capital to increase our CapEx run rate, several aspects of the current proposals need to be amended to achieve an attractive regulatory framework. We trust that the Bundesnetzagentur will take both industry and our feedback serious. And based on our long-standing experience with the regulator, we expect that also for the new regulatory period, an attractive and also internationally competitive general framework for network investments in Germany will be ensured. In light of the enormous growth potential and the need for further network investments, we remain confident that the regulator will apply its discretion in the right direction.

And let me now move to my final key message and look at our non-German network businesses, which are performing ahead of expectations, driven by strong customer demand. In H1 2025, we increased CapEx in Energy Networks outside of Germany by 11%. It's the same number as for total CapEx, so 11% in total, 11% in non-German business year-over-year. Some examples to make it tangible. In Poland, data centers are ramping up in the Warsaw area, and this is where we are the supplier. We are already installing a new 220 kV line and have a pipeline of connection requests totaling 1.8 gigawatts of capacity from data centers alone in Warsaw. That's actually spectacular. And for the non-engineers, this means that we are building in the distribution grids assets, 220 kV assets, which are normally only the topic that the TSOs are building.

In Slovakia, 6 major car manufacturers have now reserved capacity totaling around 450 megawatts. In Czechia, we have received 18,000 new connection requests in H1 2025, half of them driven by solar installation, including households within the low-voltage grid. And the list goes on and on for all the markets. What it shows is the growth is actually absolutely fundamental. There is no political driver. It's driven by customer demand in the meantime and by innovation. But in addition, it's fair to state that also the political background is overall favorable for us. The EU reaffirmed the 2040 climate target and set a renewed focus on grid expansion. Not renewables are the bottleneck of the energy transition infrastructure is.

In Germany, the new government kept the ambitious target. It also signaled the need for better synchronization between the expansion of renewables and grid infrastructure, which we fully support. And both the European Commission and the German government have put more emphasis on cost efficiency of the energy transition. And here, E.ON has actively provided thought leadership and used our system relevant positioning to support policymakers. In that sense, it is encouraging to see that 7 out of the 10 recommendations which we made in our E.ON Energy playbook, which considers a more affordable approach to net zero were actively considered in the German coalition agreement.

So let me conclude with my -- with a reiteration of my 3 key messages for today. We continue to deliver what we promise. Germany's new regulatory framework must be internationally competitive to attract the capital needed. And finally, there is a continued robust growth outlook, not only in Germany, but also in Europe.

And now over to you, Nadia, for a closer look at the numbers, please.

Thank you, Leo, and a warm welcome to all of you from my side as well. Let me start first by sharing our financial and operational development in the first half of 2025 before taking some time later in my speech to also comment on the current status of the regulatory process in Germany.

First, E.ON continued to deliver strong operational and financial performance in H1, which puts us firmly on track to deliver our full year guidance. Our adjusted EBITDA reached EUR 5.5 billion, and our adjusted net income came in at around EUR 1.8 billion, which is a year-over-year increase of 13% and 10%, respectively. Our increased earnings were predominantly driven by investment-backed growth as well as strong operational execution and value-neutral timing effects in Energy Networks. Second, we have accelerated our CapEx spending by around 11% year-over-year with the main share going to our Energy Networks business. Our planned CapEx ramp-up and EBITDA contribution are on track in terms of quarterly fill rates across all our business segments.

Third, our economic net debt outturn of around EUR 45 billion in the second quarter came in as expected, reflecting the typical seasonality of operating cash flow for the first half of the year, the usual Q2 dividend payment and higher investment activity. Our strong balance sheet continues to provide a solid foundation for our investment plans. And finally, we fully confirm our short and midterm guidance, including our dividend policy.

Let us move on to the details of our H1 year-over-year adjusted EBITDA development. The EBITDA increase was primarily driven by our Energy Networks business due to accelerated investments in our regulated asset base across almost all of our business regions. In Germany, we saw timing impacts coming from stronger volumes as well as lower redispatch costs during the first half year. As already communicated in Q1, a substantial contribution to our earnings growth also came from network loss recoveries and volume effects in Southeastern Europe. As you know, these effects are all economically neutral given the regulated nature of our segment. We are providing the year-to-date pro forma figures as part of the appendix to this presentation as we did in Q1.

Moving on to our Energy Infrastructure Solutions business. The growth in adjusted EBITDA was driven by higher weather-related volumes coming from normalized weather in the first 6 months compared to last year and improved asset availability, especially in the U.K. and the Nordics. The commissioning of new projects and increased smart metering installations in the U.K. also continued to the growth. Our Energy Retail business is performing as expected. As indicated during the Q1 call, there were adverse temperature-related effects in April and early May. Record high radiation led to lower volumes delivered to our consumer customers. After a strong Q1, we saw the anticipated earnings normalization in the U.K., which was already fully reflected in our guidance.

In our U.K. B2C customer segment, margins normalized as customers changed from SVT tariffs into fixed-term tariffs with lower margins. In our U.K. B2B business, the elevated margin from contracts made in the last years continue to roll off. Regarding our customer base, we continue to focus on value by prioritizing customer loyalty, supported by our continuously improving quality of service. Customer satisfaction increased across all major markets as shown by improving NPS scores. We expect our customer base to remain at around EUR 47 billion by year-end. Our adjusted net income came in at around EUR 1.8 billion. All P&L elements below adjusted EBITDA developed in line with our expectations. As a result, we are well on track to meet our full year 2025 guidance, supporting the promised high single-digit underlying adjusted net income growth.

Let me turn to the development of our economic net debt, which increased to EUR 45.3 billion from EUR 44 billion at the end of Q1 and EUR 41 billion at the year-end 2024. We have seen strong operating cash flow, which fully covered our Q2 investment spending. The seasonal uplift in END was driven by the usual dividend payment in May. For year-end, we expect END to be slightly below EUR 44 billion, assuming current interest rates, representing a year-over-year increase of around EUR 3 billion, driven by our significant CapEx ramp-up. Following the rating confirmations from S&P and Moody's earlier this year, we have now also received Fitch's confirmation of our strong balance sheet position. With this, all 3 rating agencies continue to positively assess our funding and financing outlook.

Let me now add some further remarks on the published RP5 proposals on top of what Leo has said. I would like to start on a positive note. In recent months, we have seen a constructive and much needed dialogue between the German regulator and the industry on shaping the future regulatory framework. This is welcome, but also essential for setting the right course to achieve our common goal for a successful energy transition in Germany. We see that the regulator wants to better link the financial parameters with the general market developments and is running the process in a transparent manner. And we also appreciate that the regulator acknowledges our competence in managing the energy transition by introducing a dynamic factor for our cost base regarding the growing number of connection requests.

As the energy transition will continue beyond the next regulatory period, this instrument is permanently needed or not only in RP5. In addition, the proposed adjustments to the cost of equity and cost of debt still do not create the attractive financial conditions required to remain competitive in the global ways for private capital. Looking beyond Germany, we see that other countries are setting more attractive investment signals. The latest draft by Ofgem in the U.K., for example, proposes a nominal post-tax ROE of around 8% plus the prospect of higher remuneration through additional incentives. As we could see from latest announcements of other international network operators, this enables massive further investments into the necessary grid build-out in the U.K.

While the shift to a more widely accepted and internationally recognized RAC-based remuneration system is a step in the right direction in Germany, it falls short of the required levels of 8% ROE, nominal post-tax as demanded by the industry and investors. For a truly more market-oriented reform, the interdependencies between the risk-free rate and the market risk premium must be taken into account and not just technical adjustments. This would allow for a consistent application of the capital asset pricing model, which results in line with market-based observations. Same applies for the cost of debt, where we also need to have a more market-based approach.

Since long-term infrastructure assets are typically financed through long-term debt, we need a dynamic rolling average approach to better reflect the recent interest rate levels instead of fixed cost of debt over the entire regulatory period using historical averages that include exceptionally low interest rate years. This approach fails to reflect actual financing conditions with the risk of slowing down investments. The mentioned aspects are crucial for the financial soundness and attractiveness of the German regulatory system. Together with other industry players and our energy associations, we are advocating for competitive market-based regulatory system to achieve our shared goal of a successful energy transition in Germany. That said, I remain confident that the regulator will consider our economically sound arguments and ultimately ensure an attractive general framework that allows us to attract additional capital to increase our CapEx.

Let me conclude today's presentation with my key takeaways and outlook. First, the strong H1 outturn firmly supports our expected earnings delivery for 2025. Second, our investment ramp-up is progressing as expected, underpinning our midterm targets. Third, our balance sheet remains solid. We will continue to focus on delivering an attractive total shareholder return based on value-creative organic growth, supporting sustainable growing annual dividend per share.

And finally, on our full year 2025 outlook. In our Energy Networks segment, we expect to reach the upper end of the guidance range, driving -- driven by the mentioned value-neutral timing effects. This brings us also to the upper end of our group EBITDA guidance range. For our adjusted net income, we expect to land comfortably within the guidance range as the positive timing effects, especially in Southeastern Europe are subject to tax and minority interest deductions. With that, we fully confirm our full year 2025 guidance and 2028 outlook, including our dividend policy.

And with that, now back to you, Iris.

Thank you very much, Nadia and Leo. And with that, we would like to start our Q&A session. And today's first question comes from you, Wanda, from UBS.

Hopefully, you can hear me. Congratulations on the H1 results. Two questions from me. The first one is on CapEx in Germany. There is a study commissioned by Germany's Economy Ministry, which plans to assess whether the current scope of grid expansion is still needed. Does it pose a risk to your CapEx plan? How much of your '25, '28 CapEx in Germany is set in stone? And if the renewable targets occurred, what is the risk to your CapEx plan?

And the second question is on -- again, on CapEx. If the allowed returns in Germany fall below your expectations, how should we think about your mid- and long-term CapEx? Because I'm trying to figure out what is the alternative to spend EUR 5 billion to EUR 10 billion financial headroom. Can you accelerate CapEx in other countries? Or is there any M&A on the table? Any color will be appreciated.

CapEx in Germany, '25 to '28, there is no risk. Period. Let me maybe just illustrate a little bit why? Yes, there is a monitoring ongoing by the politics, and you know about that. You alluded to that. That might result in the fact that we see a lower increase of electricity consumption than anticipated 5 years ago, which might then turn into the conclusion that we need to build, for example, less offshore wind farms or less onshore wind farms or that we can reduce our expansion target on renewable side.

That has no impact whatsoever on the '25 to '28 CapEx plans. Why? Because we are in a catch-up mode. We have so many bottlenecks that we need to still work against. We have an unbroken demand from customers, as I've alluded to in my speech. Therefore, I cannot see that whatever comes out of the monitoring will really impact us. Also have in mind that the terawatt-hours are important for how much a kilowatt hour cost to the customers. But what really matters for the need of the grid is the megawatt demand. Capacity is what is driving the expansion need, not energy.

And therefore, no, we don't see the risk. The discussion that we are having is only how much additional investments do we need and what do we need after '29. So no -- but your question was specifically targeted '25, '28, I don't see it. And I don't want to speculate on a bad outcome for the RP5. We are clearly focused on achieving a good outcome because that would allow us to continue the growth path that we have delivered against in the last years, which was beneficial for our customers, beneficial for our shareholders and beneficial for the energy transition. And so our current assumption is, as Nadia has said, as I have said, we will come to a conclusion, which will allow us to continue the growth trajectory. So no, this is not our concern or our key concern today.

Can I follow-up -- sorry, go ahead.

Maybe just to follow on the CapEx from 2029 onwards. We have also shown 1 scenario, which aimed at a more affordable energy transition in our playbook scenario, which was also not that -- which also said, okay, some of the elements like green hydrogen need to be reduced. And you saw from that, what we highlighted last time that there is still the significant ramp-up what Leo has just highlighted.

If I may, a very brief follow-up on the M&A because there was some press speculation that E.ON is looking to buy or sell some assets. Any comments on the M&A side?

Wanda, as you know, we don't comment on M&A speculation.

And the next question comes from Alberto.

I have 2 questions. The first one, as usual, very long. The second extremely quick. I put my hands forward, as you say. So the first one is in the previous call, you had mentioned that your request, your [Foreign Language] essentially to the regulator would be an after-tax ROE above 8%. Can I ask you, given what we know so far from the methodology paper, how far are we to get to the more than 8% after-tax return? And what do you think is needed to get there? Is it outperformance? Is it the OpEx update? Is it the actual risk-free rate methodology, the risk premium? I know what matters is not how you get there is to get there. But if you can give us any indication of where the conversations are would be fantastic.

Second question, super simple, because there is a creeping trend in the industry to finance growth or repair balance sheet through equity, can I ask you, do you envisage any scenario where you would need to raise equity to support growth over and above your EUR 5 billion to EUR 10 billion balance sheet headwind?

Yes, I can start with the first question. Thanks, Alberto. So we cannot give you a number on what the WACC calculation would mean when you take the current draft of the regulator. I think what we can say, and that is mainly due to the fact that when it comes to cost of debt calculation, we don't know kind of what time series is actually included in the calculation. As I highlighted in my speech, when you take a certain assumption on when this is determined, that would include still very low interest rate years. But we don't want to speculate on that now, and that's why we won't give you now a number on what would be a result of the WACC because we just don't know from the current draft.

You're right, when it comes to the market risk premium with the new methodology, there is an increase. So because we are going now to the arithmetic mean that would result in a market risk premium of approximately 4.6%. But as you know, in capital asset pricing models, you would come more to a market risk premium of more than 6%. So there's a certain gap in there. That would be it. So then it comes -- then maybe you...

And the other side, you know, Alberto, that first, we are pursuing a value-creating strategy that the growth is financed by an increase in earnings, which we deem to be the appropriate way given that we are not looking at a onetime increase of CapEx, but we are looking at a decade of growth, which again, I highlighted in today's speech with all the examples that I mentioned, which are just an indication that this growth is real there. It's not just something that we are dreaming about.

So that -- having said that, so we want to finance the growth from our balance sheet. We have kept some reserve in our balance sheet, and this is the way that we actually want to continue also in the RP5. So no, we are not speculating, and we are continuing to drive forward the value-creating way that we have driven over the last years, balance sheet growth, a balance sheet-driven and finance growth combined with great operational performance that then delivers superior returns.

This is really clear. Can I just follow up? You still think that a fair after-tax return on equity in Germany, all in, it doesn't matter if it comes from the return outperformance is -- should be above 8% after tax?

We have not changed our position to the outside world, so no need to correct anything.

And the next question comes from Deepa.

This is Deepa from Bernstein. So I'm going to also unfortunately, labor on the German regulation, which is my favorite topic. So a little bit more clarity just on the timing. You said you're expecting the final around Q4, but do we know when? Is it just before Christmas? Or is it October? And crucially linked to that is when will some of these parameters be frozen? And it will make a very big difference on something like the cost of debt for sure, because the 7-year period, when does it start, when does it end, will make a very big difference.

So I just wanted to know what you think of the timing on the draft as well as like when some of these parameters will be frozen. And do you generally see that you will get adequate clarity by the end of this year on the benchmarking? I think here you raised a number of points on why you're not happy with it. And then Nadia, you talked about the post-tax ROE not quite being there. We compute that it's got probably close to 6.5%, but it's still below your 8% that you talked about. Do you think you will have clarity on these 2 elements and the cost of debt by the year-end? Or some of these things will only be known in maybe '27 or whatever and so leaving you maybe with a bit more uncertainty on whether you can increase your CapEx?

Yes. So thanks, Deepa, for the questions. So first of all, we always highlighted that the regulator set himself his own timetable, which gives them until the end of the year if he follows his or their own timetable. They've got other things to do. They have got also gas regulation period coming up. So they have set themselves this own timetable by end of the year. So we wouldn't expect anything early Q4 or something because normally, if you've got a time box, you usually use it to the last minute.

That said, it can well be that the regulator doesn't follow the timetable. So we are dependent very much on that because that's not a firm law timetable, but a sort of a self-induced ambition that the regulator has given themselves. Then what we said that normally, the methodology should give us ideally enough if you got a methodology framework, we will be able to narrow down not to the last digit, but we would be able to narrow down where the capital returns are. And we don't know whether -- now the inputs, our assumption would be that the methodology is that clear that we can narrow down the capital returns. But of course, also that we don't know yet whether this is going to be the case by the back end of the year.

Yes. And for the OpEx values and the benchmarking there, the clarity on the final parameters will take longer. That's clear. But so having said all of that, we're still hopeful, but we don't know.

Yes. And we don't have any indications that the regulator sort of goes away from this anticipated timetable.

The next question comes from Harry.

So 2 for me. The first one is really an extension of Deepa's question actually, which is, how do you risk manage that you're not going to get the final return and the final cost benchmarking allowances and so on until a few years' time? And if you assume that you do raise your investment plans in February, which I think most of us are kind of leaning towards you doing that. What do you do if then subsequently things aren't as attractive as you had anticipated them to be based on the consultations you get at the end of this year? And what tools do you have to ensure that the regulator stays true to its word and they don't pull the rug from under your feet later?

And then the second one is actually kind of the opposite of Alberto's question. Given that your share price has been very strong, your yield below 4%. You've had this long-standing policy of up to 5% growth. You're transitioning from being a yield stock to a more sort of growth profile on dividend yield. And I wondered how comfortable you were with that, whether you would ever revisit your 5% growth policy if you felt that having higher income would help support the shares. And also, although it's marginal, I think you've done slightly less than 4% DPS growth in the last couple of years. Would you look to sort of move to the maximum growth to try and maintain your yield?

I might say that I'm very comfortable with my share price development. It's like -- clearly more comfortable with any -- than compared to any alternative. If we reconsider or change, then we will actually communicate after we have reconsidered. Let's maybe leave it there. But again, we are happy that not only the dividend yield has been attractive, but that also growth has materialized to the extent that we believed it would and actually that we have also been able to deliver against that. So in that sense, I think it's a luxury problem that we are discussing here.

On the CapEx plans, first, I think we should still remind ourselves that we have a clarity 3 years out, which for the 2 of us is a privilege that very few other executives have in other industries. But I mean, you expect that being from a utility industry, but 3 years like clarity out there. What we are doing is we clearly understand that we cannot bank on the sky is the limit and more resources are better. And so we are very conscious, for example, on the increase in OpEx that we do in our operational units. The number of people that we hired. You have seen that we have hired, again, 2,000 people compared to last year, but we are doing this in a very conscious way in areas where we're absolutely sure that we will need those resources going forward, also considering demographics, et cetera, et cetera.

So we are conscious on the cost side, I think, and we try to keep as much flexibility as we can because that's the way to react to unforeseen. But having said all of that, we bank on being able to achieve a sufficient regulatory outcome because it's in the interest of the customers, the energy system, the regulator politics and our shareholders. And we are confident that we will get there. But as I said, we are not blind and we are not naive. We work on being flexible enough to adjust if we need to.

Yes. Maybe let me add to what Leo has said. We are similar to the U.K. and some of the other countries, we are going into a decarbonized energy system. And there's a big need to invest and sort of keep the energy system going. We are investing more than 2.5x of our depreciation. We are highly cash flow negative business also going forward for the foreseeable decade, we see this investment growth. I know that's also part of the risk management that actually the regulator cannot afford not to give us the right regulation because then we wouldn't be able to attract the capital and then we wouldn't be investing. So it is not that we are sort of on the whim of somebody, but we are sort of clearly walking hand-in-hand together with the sort of the interest of politics, regulator and what our investors do.

And the next question comes from Louis Boujard from ODDO.

Actually, I have 2. So the first one would be regarding the, I would say, the neutral timing effect that has some consequences in the 1H that is going most likely to have also additional consequences in the second half at the EBITDA and the net income level. I was wondering if we take this into consideration to bridge 2026, what would be the magnitude that should be taken into consideration for next year? And also, what could be the actual landing point in terms of EBITDA and net income considering that next year is going to be a benchmark year for your OpEx activities into the German network activity. So do you feel comfortable with the current consensus expectation on this point? And what shall we take into consideration, I would say, in order to neutralize this different volatile effect into the earnings momentum from this year to next year?

My second question would be regarding the capital allocation. I appreciate that you already mentioned EUR 5 billion to EUR 10 billion of additional investments that could be eventually free up going forward, depending on the returns. You mentioned that eventually you could expect 8% return on equity. What if indeed you have this 8% return on equity and that in the end, you need eventually more investments in order to maximize your value to shareholders. Would you prefer a capital increase like Iberdrola and National Grid did in the past few months? Or would you prefer to go with something like additional disposals going forward, eventually in a heavy asset business in order to finance this additional need of capital in the future?

So I think we will sort of try to dissect that because it's not really only 2 questions, I believe. So first of all, I fully appreciate you're very interested in the year 2026. We are not guiding on this year now in today's call, but we will do that as we always do, starting with the full year communication 2025. But when you now ask for sort of this OpEx effects, then I can shed a bit more light on that. So as you can see also from the backup on the appendix, we have currently approximately a low triple-digit million euro figure, sort of just shy of EUR 200 million as part of absolute OpEx effects that are included in H1. That is a bit higher than we had anticipated when we were giving the outlook. And now we expect another approximately EUR 100 million for the remainder of the year, which then as we highlighted in our guidance, that sort of brings us then to the upper limit of our networks guiding range basically due to this value-neutral timing effects.

Then we don't comment on our achieved ROEs. What we always said is that we have our value creation spread, i.e., ROCE over pretax WACC of 150 to 200 basis points for our entire Energy Networks business. And in this current CapEx envelope, i.e., the 5 years' time, we are achieving this value creation spread. And bear in mind, we have got approximately -- take our entire Energy Networks business, pretax WACC of 6.5%. That leads us to approximately a ROCE from 8% to 8.5%, which we indicated in previous calls, and that's still correct. With that, maybe I give back to you because I answered the question before.

Yes. I just repeat, we don't expect a change in our funding strategy. We want to do that based on earnings-based growth. And we also have in mind that we have some headroom left. So if -- and also, I repeat what I said in my speech, the demand is there. So if all the conditions are right, we could increase already starting 2027 and then continuing in the next regulatory period. Otherwise, we can continue on the trajectory in which we are on right now.

Thank you, Leo. Then we move on to the next question, which comes from James Brand from Deutsche Bank.

I had a couple of questions. One is on the OpEx allowances. And it sounds like it would be pretty bad news to be including all the redispatch costs in there, but let's hope that the regulator sees sense and realizes, as you correctly say that, that doesn't make sense to include them. So let's exclude that. How -- is there any kind of metrics you could give us to assess how the switch to kind of an average of 2 versus the top of the 4 different metrics would impact you? How would that, for instance, have impacted you last time if that methodology have been applied? That's the first question.

The second one is on CapEx. So obviously, the hope is that you get everything you're looking for from the regulator and then given all this demand for investment that you're talking about, you can step up CapEx. Is there anything you can point us to that gives us an idea for how much we might be able to see CapEx going up if you were to get everything you want? Obviously, the world doesn't always work that way. So I'm sure you won't get everything you want. But just anything that help us quantify it.

And I was just hoping I could just sneak in -- just a clarification because Deepa asked -- it's not third question, honestly. Deepa asked about when the market parameters would be set like the risk-free rate for the cost of equity and the cost of debt. I didn't quite catch the answer to that. So maybe you could just repeat that.

Okay. I take the OpEx and then on the CapEx side, Nadia. First, no, actually, we can't quantify that because what I said in my speech is what concerns us is the multitude of simultaneous changes without an impact assessment. So a new group, different methodology, et cetera, all at the same time without an impact assessment. So therefore, it's kind of like this has created a big uncertainty for us. It's obvious, we don't know who will be in the comparison group afterwards. Will they really be comparable? And therefore, for us to quantify now the effect of 1 parameter in that, what is the 2 versus 4, that depends at the same time of who is the comparison group, who is included, who's not included.

So no, I can't give you an answer on that. But as I tried to highlight in my speech, that's exactly the point. We would have expected an incentive -- a change in the methodology to be followed, accompanied by an impact assessment. And if not, what we are struggling with is this might actually lead to the fact that even if you are efficient, you just become unefficient all of a sudden because you have changed the methodology and you're still doing exactly what you have done before. And I thank you for the moral support on the redispatching cost.

Yes. So first, I'll take the last question on the risk-free rate. So there are multiple things. So first of all, of course, for us, it will be good to know by the end of the year, which time series is going to be used. We always said that the actual fixing of the interest will be closer to sort of the start of the new regulatory period. We now sort of the uncertainty that comes out is now that we need to know, of course, what time series will be used in order to assess how attractive the cost of capital is. So we have never assumed that we will get sort of the finally nailed down number. But if we've got enough clarity of the methodology, then we can, of course, use that to compute every -- compute it whilst we are going. And currently, we don't know yet which time series are going to be used. I hope that clarifies.

And when it comes to CapEx, we said that we will say -- talk about the CapEx our next full year communication. Currently, we don't have the clarity yet in order to boost our CapEx, it would be required that the current proposals are being amended. That's why we just need to ask you to bear with ourselves. We have in the current envelope, we have got EUR 35 billion associated with the European overall network spend for the 5 years. We have approximately EUR 26 billion out of that belonging to the German business, thereof approximately EUR 21 billion for the 5 years for the electricity RAB CapEx. And that is the only clarity that I can give on CapEx as of now. And -- if and how we would ramp up, we would only communicate when we know that the sort of our amendments have been made.

That brings us to the next question, which comes from Piotr from Citi.

So I will have 2. So the first one, I remember 2 quarters ago, we were a bit excited about this EUR 500 billion infrastructure fund in Germany. And I wonder if there is any follow-up on this and possibly a discussion that some of these funds could be used to funding the development of the grid or the TSO, DSO level. And the reason I ask this is because we are now going through the regulatory review, whereby you, as an industry demand relatively high returns in order to mobilize extra capital, but maybe there is an alternative cheaper way to fund it via the subsidies. And therefore, trying to avoid the impact of the power bills and kind of make everybody happy with you not really being able to spend more money. So just thinking about how to fund it, the CapEx. So there's simply no details on it, if you can maybe clarify this.

And the second question I have on your -- I'm not asking specifically about the disposal of the Czech gas business, but there was a headline like this. But just more broadly on your -- because over the quarters, you were saying that you are happy with your portfolio, but you continuously to review it. So can you maybe tell us what kind of a criteria? What is your current thinking like you don't like the gas assets or you think this is the right time as we go into -- you need to accelerate and spend money on power grid? Or directionally, why would you consider such asset as this one, not particularly, but then we could have a bit more your thinking like what could come next with your -- all of the asset rotation?

Yes. On the EUR 500 billion first, we positively take note of the fact that the German government, when they actually set up this EUR 500 billion infrastructure fund, they have highlighted the importance of energy infrastructure for Germany as a place to be. And that is obviously supportive for us. We, however, do not expect like direct subsidies out of that. Actually, I mean, I get such questions in political debates. It's the first time I get it like in a capital call. I actually -- I mean, funds are limited. It's like -- and it's not -- I mean, what we are talking about is we can discuss whether we can shift parts of the bill into the state budget, but then the state actually needs higher taxes because I don't see them actually cutting anywhere else in exchange, so to say.

So in the end, the customers pay via taxes or via the bills, one way or another. So therefore, the way to actually make energy cheaper is to do a better energy transition, which is what we have always been advocating and not just shifting inefficient spendings into the state budget. So -- and I repeat what I also said earlier, we actually don't want subsidies. We want a regulation which allows us to earn the money that we need to attract the capital that we need to make our investments. That is actually sustainable. It's actually more sustainable than an insufficient regulation and subsidies, which in the long run won't work given the amount of money that we need for the energy transition.

The only exception where we have a direct impact is we are going to see some direct support of TSO grid fees via these facilities from the state. That is, for me, an acceptable subsidy, I would say, given the huge magnitude of TSO buildup infrastructure in offshore, which is really somehow special. So -- but apart from that, we are not expecting and we are not desiring direct subsidies. We actually want the ability to earn what we need to earn for the investments we make.

Yes. Then coming to your point on M&A, we have got our fully discretionary M&A disposal program of EUR 2 billion, where we realized some EUR 150 million last year. We have got a pending Romanian transaction when it comes to the supply business there. And what we always said is we are -- and Leo highlighted it earlier, we are very happy with our portfolio. We are actually now in the strategic space where we belong. And that's why we will not now say this or this part is noncore. There are some smaller transactions that we could foresee. And whenever we say we put this or this on the block, it's not most likely to be a value-creative disposal for us. And that's why we don't do and apologize for that, but we cannot comment any further.

With that, we come to our last question for today's call, and this is coming from Ahmed from Jefferies.

Two from my side. I appreciate your comments that, look, there's sort of a lot of sort of changes being proposed and it's -- the process is still in the consultation phase. But I do wanted to ask you, if you sort of take the proposals as they are, so on the cost of equity side, you have certain potential improvements, but it sounds like there are certain other changes on the benchmarking side. If you sort of take the 2 together, is there anything you can say directionally what -- as the proposals stand, what do they mean for your value creation spread? Does it actually sort of the 2 changes today point to a better value creation spread, the same? Or is it even sort of slightly sort of a headwind for you? So that's my first question.

My second question is just on the procedure from the year-end when you are expecting the methodological papers. Again, I take your point that you hope that this is going to be a constructive process. But in case it sort of does not sort of turns out to be the outcome that you hope to achieve, what is the procedure from there onwards? Is there a recourse mechanism for you? Is there sort of somewhere -- is there a process where you can appeal this? Just wanted to understand that better.

Yes. I think I can actually combine the 2 questions. Number one is, I want to repeat, until 2028, included, we have a funding strategy that should allow us to continue on the growth path in which we are on with a 10% RAB growth on the power side, attractive growth of dividends, et cetera, et cetera, basically our framework, our financial framework. And now I don't want -- and now you're obviously asking the question, what if everything would stay unchanged. I don't want to actually embark on that speculation now for '29 forwards. The process is not finished yet. And I think the facts are on the table. And I think we will actually -- we will have constructive discussions how we can achieve a framework, which allows the continuation of the energy transition for the benefit of the energy transition of our customers and then eventually also of those who are actually supposed to make the investments, i.e., our investors.

And therefore, it's like what if -- what if everything else -- no, actually, we are clearly focused on continuing the growth strategy that we have on the table. And we will not speculate on what might happen. If not, we will react to whatever happens, but that we will then do in due course. And until then, we are on the time line that Nadia has actually already laid out until the end of the year. And then we will take stock and then we will look forward. But again, no speculation now '28 onwards.

So with that, thank you very much, everyone, for participating. Thank you, Leo and Nadia. And as always, if there are any sort of follow-up questions, the IR team is happy to also engage in bilateral discussions with you afterwards. Thank you all very much for participating in today's call, and have a good rest of the day. Thank you very much, and bye-bye.